Correlation Between CenterPoint Energy and Pernod Ricard
Can any of the company-specific risk be diversified away by investing in both CenterPoint Energy and Pernod Ricard 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 CenterPoint Energy and Pernod Ricard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CenterPoint Energy and Pernod Ricard SA, you can compare the effects of market volatilities on CenterPoint Energy and Pernod Ricard 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 CenterPoint Energy with a short position of Pernod Ricard. Check out your portfolio center. Please also check ongoing floating volatility patterns of CenterPoint Energy and Pernod Ricard.
Diversification Opportunities for CenterPoint Energy and Pernod Ricard
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CenterPoint and Pernod is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding CenterPoint Energy and Pernod Ricard SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pernod Ricard SA and CenterPoint Energy 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 CenterPoint Energy are associated (or correlated) with Pernod Ricard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pernod Ricard SA has no effect on the direction of CenterPoint Energy i.e., CenterPoint Energy and Pernod Ricard go up and down completely randomly.
Pair Corralation between CenterPoint Energy and Pernod Ricard
Assuming the 90 days horizon CenterPoint Energy is expected to generate 0.68 times more return on investment than Pernod Ricard. However, CenterPoint Energy is 1.47 times less risky than Pernod Ricard. It trades about 0.08 of its potential returns per unit of risk. Pernod Ricard SA is currently generating about 0.0 per unit of risk. If you would invest 3,080 in CenterPoint Energy on October 23, 2024 and sell it today you would earn a total of 40.00 from holding CenterPoint Energy or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
CenterPoint Energy vs. Pernod Ricard SA
Performance |
| Timeline |
| CenterPoint Energy |
| Pernod Ricard SA |
CenterPoint Energy and Pernod Ricard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CenterPoint Energy and Pernod Ricard
The main advantage of trading using opposite CenterPoint Energy and Pernod Ricard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CenterPoint Energy position performs unexpectedly, Pernod Ricard 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 Pernod Ricard will offset losses from the drop in Pernod Ricard's long position.| CenterPoint Energy vs. MARKET VECTR RETAIL | CenterPoint Energy vs. UNIVERSAL MUSIC GROUP | CenterPoint Energy vs. Fast Retailing Co | CenterPoint Energy vs. CeoTronics AG |
| Pernod Ricard vs. RYU Apparel | Pernod Ricard vs. SEKISUI CHEMICAL | Pernod Ricard vs. MeVis Medical Solutions | Pernod Ricard vs. G III Apparel Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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