Correlation Between Innergex Renewable and Korea Electric
Can any of the company-specific risk be diversified away by investing in both Innergex Renewable and Korea 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 Innergex Renewable and Korea Electric 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 Korea Electric Power, you can compare the effects of market volatilities on Innergex Renewable and Korea 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 Innergex Renewable with a short position of Korea Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innergex Renewable and Korea Electric.
Diversification Opportunities for Innergex Renewable and Korea Electric
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Innergex and Korea is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Innergex Renewable Energy and Korea Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electric Power 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 Korea Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electric Power has no effect on the direction of Innergex Renewable i.e., Innergex Renewable and Korea Electric go up and down completely randomly.
Pair Corralation between Innergex Renewable and Korea Electric
Assuming the 90 days horizon Innergex Renewable is expected to generate 2.19 times less return on investment than Korea Electric. In addition to that, Innergex Renewable is 1.57 times more volatile than Korea Electric Power. It trades about 0.01 of its total potential returns per unit of risk. Korea Electric Power is currently generating about 0.04 per unit of volatility. If you would invest 750.00 in Korea Electric Power on September 2, 2024 and sell it today you would earn a total of 150.00 from holding Korea Electric Power or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
Innergex Renewable Energy vs. Korea Electric Power
Performance |
| Timeline |
| Innergex Renewable Energy |
| Korea Electric Power |
Innergex Renewable and Korea Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innergex Renewable and Korea Electric
The main advantage of trading using opposite Innergex Renewable and Korea Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innergex Renewable position performs unexpectedly, Korea 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 Korea Electric will offset losses from the drop in Korea Electric'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 |
| Korea Electric vs. Enel Chile SA | Korea Electric vs. Centrais Eltricas Brasileiras | Korea Electric vs. Central Puerto SA | Korea 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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