Correlation Between IDACORP and SCE Trust
Can any of the company-specific risk be diversified away by investing in both IDACORP and SCE Trust 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 SCE Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDACORP and SCE Trust VIII, you can compare the effects of market volatilities on IDACORP and SCE Trust 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 SCE Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDACORP and SCE Trust.
Diversification Opportunities for IDACORP and SCE Trust
Very good diversification
The 3 months correlation between IDACORP and SCE is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding IDACORP and SCE Trust VIII in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCE Trust VIII 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 SCE Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCE Trust VIII has no effect on the direction of IDACORP i.e., IDACORP and SCE Trust go up and down completely randomly.
Pair Corralation between IDACORP and SCE Trust
Considering the 90-day investment horizon IDACORP is expected to under-perform the SCE Trust. In addition to that, IDACORP is 2.58 times more volatile than SCE Trust VIII. It trades about -0.27 of its total potential returns per unit of risk. SCE Trust VIII is currently generating about -0.26 per unit of volatility. If you would invest 2,672 in SCE Trust VIII on September 13, 2024 and sell it today you would lose (37.00) from holding SCE Trust VIII or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
IDACORP vs. SCE Trust VIII
Performance |
| Timeline |
| IDACORP |
| SCE Trust VIII |
IDACORP and SCE Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDACORP and SCE Trust
The main advantage of trading using opposite IDACORP and SCE Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDACORP position performs unexpectedly, SCE Trust 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 SCE Trust will offset losses from the drop in SCE Trust's long position.| IDACORP vs. CMS Energy | IDACORP vs. Pinnacle West Capital | IDACORP vs. Alliant Energy Corp | IDACORP vs. Portland General Electric |
| SCE Trust vs. Dominion Energy | SCE Trust vs. Consolidated Edison | SCE Trust vs. Eversource Energy | SCE Trust vs. FirstEnergy |
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.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |