Correlation Between NRG Energy and 125896BN9
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By analyzing existing cross correlation between NRG Energy and CMS ENERGY P, you can compare the effects of market volatilities on NRG Energy and 125896BN9 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 125896BN9. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRG Energy and 125896BN9.
Diversification Opportunities for NRG Energy and 125896BN9
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between NRG and 125896BN9 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding NRG Energy and CMS ENERGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMS ENERGY P 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 125896BN9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMS ENERGY P has no effect on the direction of NRG Energy i.e., NRG Energy and 125896BN9 go up and down completely randomly.
Pair Corralation between NRG Energy and 125896BN9
Considering the 90-day investment horizon NRG Energy is expected to generate 2.39 times more return on investment than 125896BN9. However, NRG Energy is 2.39 times more volatile than CMS ENERGY P. It trades about 0.15 of its potential returns per unit of risk. CMS ENERGY P is currently generating about 0.01 per unit of risk. If you would invest 4,639 in NRG Energy on September 2, 2024 and sell it today you would earn a total of 5,522 from holding NRG Energy or generate 119.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 54.03% |
| Values | Daily Returns |
NRG Energy vs. CMS ENERGY P
Performance |
| Timeline |
| NRG Energy |
| CMS ENERGY P |
NRG Energy and 125896BN9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRG Energy and 125896BN9
The main advantage of trading using opposite NRG Energy and 125896BN9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRG Energy position performs unexpectedly, 125896BN9 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 125896BN9 will offset losses from the drop in 125896BN9's long position.| NRG Energy vs. TransAlta Corp | NRG Energy vs. Kenon Holdings | NRG Energy vs. Pampa Energia SA | NRG Energy vs. AGL Energy |
| 125896BN9 vs. CenterPoint Energy | 125896BN9 vs. NRG Energy | 125896BN9 vs. American Airlines Group | 125896BN9 vs. NiSource |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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