Correlation Between IDACORP and Union Electric
Can any of the company-specific risk be diversified away by investing in both IDACORP and Union Electric 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 Union Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDACORP and Union Electric, you can compare the effects of market volatilities on IDACORP and Union Electric 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 Union Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDACORP and Union Electric.
Diversification Opportunities for IDACORP and Union Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IDACORP and Union is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IDACORP and Union Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Electric 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 Union Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Electric has no effect on the direction of IDACORP i.e., IDACORP and Union Electric go up and down completely randomly.
Pair Corralation between IDACORP and Union Electric
If you would invest 10,430 in IDACORP on January 10, 2025 and sell it today you would earn a total of 1,044 from holding IDACORP or generate 10.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
IDACORP vs. Union Electric
Performance |
| Timeline |
| IDACORP |
| Union Electric |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
IDACORP and Union Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDACORP and Union Electric
The main advantage of trading using opposite IDACORP and Union Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDACORP position performs unexpectedly, Union Electric 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 Union Electric will offset losses from the drop in Union Electric's long position.| IDACORP vs. CMS Energy | IDACORP vs. Pinnacle West Capital | IDACORP vs. Alliant Energy Corp | IDACORP vs. Portland General Electric |
| Union Electric vs. IDACORP | Union Electric vs. Pinnacle West Capital | Union Electric vs. Portland General Electric | Union Electric vs. CMS Energy |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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