Correlation Between Hawaiian Electric and PGE Corp
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and PGE Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hawaiian Electric and PGE Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Electric Industries and PGE Corp, you can compare the effects of market volatilities on Hawaiian Electric and PGE Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hawaiian Electric with a short position of PGE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and PGE Corp.
Diversification Opportunities for Hawaiian Electric and PGE Corp
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hawaiian and PGE is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and PGE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGE Corp and Hawaiian Electric is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hawaiian Electric Industries are associated (or correlated) with PGE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGE Corp has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and PGE Corp go up and down completely randomly.
Pair Corralation between Hawaiian Electric and PGE Corp
Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to generate 2.41 times more return on investment than PGE Corp. However, Hawaiian Electric is 2.41 times more volatile than PGE Corp. It trades about 0.16 of its potential returns per unit of risk. PGE Corp is currently generating about 0.15 per unit of risk. If you would invest 972.00 in Hawaiian Electric Industries on August 24, 2024 and sell it today you would earn a total of 78.00 from holding Hawaiian Electric Industries or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. PGE Corp
Performance |
| Timeline |
| Hawaiian Electric |
| PGE Corp |
Hawaiian Electric and PGE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and PGE Corp
The main advantage of trading using opposite Hawaiian Electric and PGE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, PGE Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PGE Corp will offset losses from the drop in PGE Corp's long position.| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
| PGE Corp vs. Consolidated Edison | PGE Corp vs. Southern Company | PGE Corp vs. Entergy | PGE Corp vs. Pinnacle West Capital |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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