Correlation Between IDACORP and NextEra Energy,
Can any of the company-specific risk be diversified away by investing in both IDACORP and NextEra 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 NextEra Energy, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDACORP and NextEra Energy,, you can compare the effects of market volatilities on IDACORP and NextEra 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 NextEra Energy,. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDACORP and NextEra Energy,.
Diversification Opportunities for IDACORP and NextEra Energy,
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IDACORP and NextEra is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding IDACORP and NextEra Energy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextEra 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 NextEra Energy,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextEra Energy, has no effect on the direction of IDACORP i.e., IDACORP and NextEra Energy, go up and down completely randomly.
Pair Corralation between IDACORP and NextEra Energy,
Considering the 90-day investment horizon IDACORP is expected to generate 0.89 times more return on investment than NextEra Energy,. However, IDACORP is 1.12 times less risky than NextEra Energy,. It trades about 0.54 of its potential returns per unit of risk. NextEra Energy, is currently generating about -0.2 per unit of risk. If you would invest 10,299 in IDACORP on August 28, 2024 and sell it today you would earn a total of 1,597 from holding IDACORP or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDACORP vs. NextEra Energy,
Performance |
| Timeline |
| IDACORP |
| NextEra Energy, |
IDACORP and NextEra Energy, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDACORP and NextEra Energy,
The main advantage of trading using opposite IDACORP and NextEra Energy, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDACORP position performs unexpectedly, NextEra 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 NextEra Energy, will offset losses from the drop in NextEra Energy,'s long position.| IDACORP vs. CMS Energy | IDACORP vs. Pinnacle West Capital | IDACORP vs. Alliant Energy Corp | IDACORP vs. Portland General Electric |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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