Correlation Between Hawaiian Electric and RAADR
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and RAADR 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 RAADR 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 RAADR Inc, you can compare the effects of market volatilities on Hawaiian Electric and RAADR 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 RAADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and RAADR.
Diversification Opportunities for Hawaiian Electric and RAADR
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hawaiian and RAADR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and RAADR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RAADR Inc 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 RAADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RAADR Inc has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and RAADR go up and down completely randomly.
Pair Corralation between Hawaiian Electric and RAADR
Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to generate 0.19 times more return on investment than RAADR. However, Hawaiian Electric Industries is 5.18 times less risky than RAADR. It trades about 0.19 of its potential returns per unit of risk. RAADR Inc is currently generating about -0.03 per unit of risk. If you would invest 933.00 in Hawaiian Electric Industries on December 5, 2024 and sell it today you would earn a total of 121.00 from holding Hawaiian Electric Industries or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. RAADR Inc
Performance |
| Timeline |
| Hawaiian Electric |
| RAADR Inc |
Hawaiian Electric and RAADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and RAADR
The main advantage of trading using opposite Hawaiian Electric and RAADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, RAADR 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 RAADR will offset losses from the drop in RAADR's long position.| Hawaiian Electric vs. DTE Energy | ||
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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