Correlation Between Innergex Renewable and Consumers Energy
Can any of the company-specific risk be diversified away by investing in both Innergex Renewable and Consumers 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 Innergex Renewable and Consumers Energy 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 Consumers Energy, you can compare the effects of market volatilities on Innergex Renewable and Consumers 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 Innergex Renewable with a short position of Consumers Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innergex Renewable and Consumers Energy.
Diversification Opportunities for Innergex Renewable and Consumers Energy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innergex and Consumers is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Innergex Renewable Energy and Consumers Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumers Energy 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 Consumers Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumers Energy has no effect on the direction of Innergex Renewable i.e., Innergex Renewable and Consumers Energy go up and down completely randomly.
Pair Corralation between Innergex Renewable and Consumers Energy
Assuming the 90 days horizon Innergex Renewable Energy is expected to under-perform the Consumers Energy. In addition to that, Innergex Renewable is 2.04 times more volatile than Consumers Energy. It trades about -0.02 of its total potential returns per unit of risk. Consumers Energy is currently generating about 0.0 per unit of volatility. If you would invest 8,542 in Consumers Energy on August 31, 2024 and sell it today you would lose (362.00) from holding Consumers Energy or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.33% |
| Values | Daily Returns |
Innergex Renewable Energy vs. Consumers Energy
Performance |
| Timeline |
| Innergex Renewable Energy |
| Consumers Energy |
Innergex Renewable and Consumers Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innergex Renewable and Consumers Energy
The main advantage of trading using opposite Innergex Renewable and Consumers Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innergex Renewable position performs unexpectedly, Consumers 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 Consumers Energy will offset losses from the drop in Consumers Energy's long position.| Innergex Renewable vs. Nextera Energy | Innergex Renewable vs. Consumers Energy | Innergex Renewable vs. Duke Energy | Innergex Renewable vs. Centrais Electricas Brasileiras |
| Consumers Energy vs. Nextera Energy | Consumers Energy vs. Duke Energy | Consumers Energy vs. PGE Corp | Consumers Energy vs. Southern Company |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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