Correlation Between IDACORP and Dominion Energy
Can any of the company-specific risk be diversified away by investing in both IDACORP and Dominion Energy 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 IDACORP and Dominion Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDACORP and Dominion Energy, you can compare the effects of market volatilities on IDACORP and Dominion Energy 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 IDACORP with a short position of Dominion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDACORP and Dominion Energy.
Diversification Opportunities for IDACORP and Dominion Energy
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IDACORP and Dominion is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding IDACORP and Dominion Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Energy and IDACORP 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 IDACORP are associated (or correlated) with Dominion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Energy has no effect on the direction of IDACORP i.e., IDACORP and Dominion Energy go up and down completely randomly.
Pair Corralation between IDACORP and Dominion Energy
Considering the 90-day investment horizon IDACORP is expected to generate 0.79 times more return on investment than Dominion Energy. However, IDACORP is 1.27 times less risky than Dominion Energy. It trades about 0.03 of its potential returns per unit of risk. Dominion Energy is currently generating about 0.02 per unit of risk. If you would invest 10,121 in IDACORP on August 24, 2024 and sell it today you would earn a total of 1,770 from holding IDACORP or generate 17.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDACORP vs. Dominion Energy
Performance |
| Timeline |
| IDACORP |
| Dominion Energy |
IDACORP and Dominion Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDACORP and Dominion Energy
The main advantage of trading using opposite IDACORP and Dominion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDACORP position performs unexpectedly, Dominion Energy 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 Dominion Energy will offset losses from the drop in Dominion Energy's long position.| IDACORP vs. CMS Energy | IDACORP vs. Pinnacle West Capital | IDACORP vs. Alliant Energy Corp | IDACORP vs. Portland General Electric |
| Dominion Energy vs. Korea Electric Power | Dominion Energy vs. Centrais Electricas Brasileiras | Dominion Energy vs. MGE Energy | Dominion Energy vs. IDACORP |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |