Correlation Between NRG Energy and Charles
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By analyzing existing cross correlation between NRG Energy and Charles River Laboratories, you can compare the effects of market volatilities on NRG Energy and Charles 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 Charles. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRG Energy and Charles.
Diversification Opportunities for NRG Energy and Charles
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NRG and Charles is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NRG Energy and Charles River Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charles River Labora 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 Charles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charles River Labora has no effect on the direction of NRG Energy i.e., NRG Energy and Charles go up and down completely randomly.
Pair Corralation between NRG Energy and Charles
Considering the 90-day investment horizon NRG Energy is expected to generate 7.22 times more return on investment than Charles. However, NRG Energy is 7.22 times more volatile than Charles River Laboratories. It trades about 0.17 of its potential returns per unit of risk. Charles River Laboratories is currently generating about -0.13 per unit of risk. If you would invest 7,939 in NRG Energy on September 2, 2024 and sell it today you would earn a total of 2,222 from holding NRG Energy or generate 27.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.94% |
| Values | Daily Returns |
NRG Energy vs. Charles River Laboratories
Performance |
| Timeline |
| NRG Energy |
| Charles River Labora |
NRG Energy and Charles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRG Energy and Charles
The main advantage of trading using opposite NRG Energy and Charles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRG Energy position performs unexpectedly, Charles 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 Charles will offset losses from the drop in Charles' long position.| NRG Energy vs. TransAlta Corp | NRG Energy vs. Kenon Holdings | NRG Energy vs. Pampa Energia SA | NRG Energy vs. AGL Energy |
| Charles vs. AEP TEX INC | Charles vs. US BANK NATIONAL | Charles vs. Bank of America | Charles vs. GE Aerospace |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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