Correlation Between IDACORP and Entergy New
Can any of the company-specific risk be diversified away by investing in both IDACORP and Entergy New 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 Entergy New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDACORP and Entergy New Orleans, you can compare the effects of market volatilities on IDACORP and Entergy New 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 Entergy New. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDACORP and Entergy New.
Diversification Opportunities for IDACORP and Entergy New
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IDACORP and Entergy is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding IDACORP and Entergy New Orleans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy New Orleans 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 Entergy New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy New Orleans has no effect on the direction of IDACORP i.e., IDACORP and Entergy New go up and down completely randomly.
Pair Corralation between IDACORP and Entergy New
Considering the 90-day investment horizon IDACORP is expected to generate 0.99 times more return on investment than Entergy New. However, IDACORP is 1.01 times less risky than Entergy New. It trades about 0.62 of its potential returns per unit of risk. Entergy New Orleans is currently generating about -0.03 per unit of risk. If you would invest 10,134 in IDACORP on August 31, 2024 and sell it today you would earn a total of 1,740 from holding IDACORP or generate 17.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDACORP vs. Entergy New Orleans
Performance |
| Timeline |
| IDACORP |
| Entergy New Orleans |
IDACORP and Entergy New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDACORP and Entergy New
The main advantage of trading using opposite IDACORP and Entergy New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDACORP position performs unexpectedly, Entergy New 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 Entergy New will offset losses from the drop in Entergy New's long position.| IDACORP vs. CMS Energy | IDACORP vs. Pinnacle West Capital | IDACORP vs. Alliant Energy Corp | IDACORP vs. Portland General Electric |
| Entergy New vs. Entergy New Orleans | Entergy New vs. Entergy Arkansas LLC | Entergy New vs. Entergy Mississippi LLC | Entergy New vs. Entergy Louisiana LLC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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