Correlation Between NRG Energy and Bellevue Life
Can any of the company-specific risk be diversified away by investing in both NRG Energy and Bellevue Life 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 NRG Energy and Bellevue Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRG Energy and Bellevue Life Sciences, you can compare the effects of market volatilities on NRG Energy and Bellevue Life 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 NRG Energy with a short position of Bellevue Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRG Energy and Bellevue Life.
Diversification Opportunities for NRG Energy and Bellevue Life
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NRG and Bellevue is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NRG Energy and Bellevue Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Life Sciences and NRG Energy 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 NRG Energy are associated (or correlated) with Bellevue Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Life Sciences has no effect on the direction of NRG Energy i.e., NRG Energy and Bellevue Life go up and down completely randomly.
Pair Corralation between NRG Energy and Bellevue Life
Considering the 90-day investment horizon NRG Energy is expected to generate 1.24 times more return on investment than Bellevue Life. However, NRG Energy is 1.24 times more volatile than Bellevue Life Sciences. It trades about 0.16 of its potential returns per unit of risk. Bellevue Life Sciences is currently generating about 0.03 per unit of risk. If you would invest 8,833 in NRG Energy on October 26, 2024 and sell it today you would earn a total of 2,221 from holding NRG Energy or generate 25.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRG Energy vs. Bellevue Life Sciences
Performance |
| Timeline |
| NRG Energy |
| Bellevue Life Sciences |
NRG Energy and Bellevue Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRG Energy and Bellevue Life
The main advantage of trading using opposite NRG Energy and Bellevue Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRG Energy position performs unexpectedly, Bellevue Life 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 Bellevue Life will offset losses from the drop in Bellevue Life's long position.| NRG Energy vs. TransAlta Corp | NRG Energy vs. Kenon Holdings | NRG Energy vs. Pampa Energia SA | NRG Energy vs. AGL Energy |
| Bellevue Life vs. Nicola Mining | Bellevue Life vs. United Utilities Group | Bellevue Life vs. NRG Energy | Bellevue Life vs. Enlight Renewable 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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