Correlation Between Innergex Renewable and Central Puerto
Can any of the company-specific risk be diversified away by investing in both Innergex Renewable and Central Puerto 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 Innergex Renewable and Central Puerto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innergex Renewable Energy and Central Puerto SA, you can compare the effects of market volatilities on Innergex Renewable and Central Puerto 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 Innergex Renewable with a short position of Central Puerto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innergex Renewable and Central Puerto.
Diversification Opportunities for Innergex Renewable and Central Puerto
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Innergex and Central is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Innergex Renewable Energy and Central Puerto SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Puerto SA and Innergex Renewable 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 Innergex Renewable Energy are associated (or correlated) with Central Puerto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Puerto SA has no effect on the direction of Innergex Renewable i.e., Innergex Renewable and Central Puerto go up and down completely randomly.
Pair Corralation between Innergex Renewable and Central Puerto
Assuming the 90 days horizon Innergex Renewable is expected to generate 5.63 times less return on investment than Central Puerto. In addition to that, Innergex Renewable is 1.18 times more volatile than Central Puerto SA. It trades about 0.01 of its total potential returns per unit of risk. Central Puerto SA is currently generating about 0.09 per unit of volatility. If you would invest 813.00 in Central Puerto SA on September 2, 2024 and sell it today you would earn a total of 550.00 from holding Central Puerto SA or generate 67.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
Innergex Renewable Energy vs. Central Puerto SA
Performance |
| Timeline |
| Innergex Renewable Energy |
| Central Puerto SA |
Innergex Renewable and Central Puerto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innergex Renewable and Central Puerto
The main advantage of trading using opposite Innergex Renewable and Central Puerto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innergex Renewable position performs unexpectedly, Central Puerto 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 Central Puerto will offset losses from the drop in Central Puerto's long position.| Innergex Renewable vs. Orsted AS | Innergex Renewable vs. Clearway Energy | Innergex Renewable vs. Fusion Fuel Green | Innergex Renewable vs. Powertap Hydrogen Capital |
| Central Puerto vs. Korea Electric Power | Central Puerto vs. Centrais Electricas Brasileiras | Central Puerto vs. MGE Energy | Central Puerto 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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