Correlation Between NYSE Composite and Hawaiian Electric
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Hawaiian 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 NYSE Composite and Hawaiian Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Hawaiian Electric Industries, you can compare the effects of market volatilities on NYSE Composite and Hawaiian 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 NYSE Composite with a short position of Hawaiian Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Hawaiian Electric.
Diversification Opportunities for NYSE Composite and Hawaiian Electric
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Hawaiian is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Hawaiian Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Electric and NYSE Composite 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 NYSE Composite are associated (or correlated) with Hawaiian Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Electric has no effect on the direction of NYSE Composite i.e., NYSE Composite and Hawaiian Electric go up and down completely randomly.
Pair Corralation between NYSE Composite and Hawaiian Electric
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.69 times less return on investment than Hawaiian Electric. But when comparing it to its historical volatility, NYSE Composite is 3.44 times less risky than Hawaiian Electric. It trades about 0.24 of its potential returns per unit of risk. Hawaiian Electric Industries is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,007 in Hawaiian Electric Industries on August 27, 2024 and sell it today you would earn a total of 54.00 from holding Hawaiian Electric Industries or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Hawaiian Electric Industries
Performance |
| Timeline |
NYSE Composite and Hawaiian Electric Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Hawaiian Electric Industries
Pair trading matchups for Hawaiian Electric
Pair Trading with NYSE Composite and Hawaiian Electric
The main advantage of trading using opposite NYSE Composite and Hawaiian Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Hawaiian 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 Hawaiian Electric will offset losses from the drop in Hawaiian Electric's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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