Correlation Between Hawaiian Electric and Triple Flag
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and Triple Flag 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 Triple Flag 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 Triple Flag Precious, you can compare the effects of market volatilities on Hawaiian Electric and Triple Flag 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 Triple Flag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and Triple Flag.
Diversification Opportunities for Hawaiian Electric and Triple Flag
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hawaiian and Triple is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and Triple Flag Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triple Flag Precious 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 Triple Flag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triple Flag Precious has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and Triple Flag go up and down completely randomly.
Pair Corralation between Hawaiian Electric and Triple Flag
Allowing for the 90-day total investment horizon Hawaiian Electric is expected to generate 5.5 times less return on investment than Triple Flag. In addition to that, Hawaiian Electric is 2.42 times more volatile than Triple Flag Precious. It trades about 0.01 of its total potential returns per unit of risk. Triple Flag Precious is currently generating about 0.07 per unit of volatility. If you would invest 1,779 in Triple Flag Precious on December 11, 2024 and sell it today you would earn a total of 737.00 from holding Triple Flag Precious or generate 41.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.68% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. Triple Flag Precious
Performance |
| Timeline |
| Hawaiian Electric |
| Triple Flag Precious |
Hawaiian Electric and Triple Flag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and Triple Flag
The main advantage of trading using opposite Hawaiian Electric and Triple Flag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, Triple Flag 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 Triple Flag will offset losses from the drop in Triple Flag'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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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