Correlation Between Hawaiian Electric and Via Renewables
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and Via Renewables 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 Via Renewables 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 Via Renewables, you can compare the effects of market volatilities on Hawaiian Electric and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and Via Renewables.
Diversification Opportunities for Hawaiian Electric and Via Renewables
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hawaiian and Via is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and Via Renewables go up and down completely randomly.
Pair Corralation between Hawaiian Electric and Via Renewables
Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to under-perform the Via Renewables. In addition to that, Hawaiian Electric is 2.7 times more volatile than Via Renewables. It trades about -0.04 of its total potential returns per unit of risk. Via Renewables is currently generating about 0.08 per unit of volatility. If you would invest 2,084 in Via Renewables on September 2, 2024 and sell it today you would earn a total of 127.00 from holding Via Renewables or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. Via Renewables
Performance |
| Timeline |
| Hawaiian Electric |
| Via Renewables |
Hawaiian Electric and Via Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and Via Renewables
The main advantage of trading using opposite Hawaiian Electric and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' long position.| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
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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