Correlation Between PGE Corp and Safety Shot
Can any of the company-specific risk be diversified away by investing in both PGE Corp and Safety Shot 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 PGE Corp and Safety Shot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGE Corp and Safety Shot, you can compare the effects of market volatilities on PGE Corp and Safety Shot 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 PGE Corp with a short position of Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGE Corp and Safety Shot.
Diversification Opportunities for PGE Corp and Safety Shot
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PGE and Safety is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding PGE Corp and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot and PGE Corp 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 PGE Corp are associated (or correlated) with Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of PGE Corp i.e., PGE Corp and Safety Shot go up and down completely randomly.
Pair Corralation between PGE Corp and Safety Shot
Considering the 90-day investment horizon PGE Corp is expected to generate 0.15 times more return on investment than Safety Shot. However, PGE Corp is 6.49 times less risky than Safety Shot. It trades about 0.5 of its potential returns per unit of risk. Safety Shot is currently generating about -0.12 per unit of risk. If you would invest 1,995 in PGE Corp on September 3, 2024 and sell it today you would earn a total of 168.00 from holding PGE Corp or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PGE Corp vs. Safety Shot
Performance |
| Timeline |
| PGE Corp |
| Safety Shot |
PGE Corp and Safety Shot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGE Corp and Safety Shot
The main advantage of trading using opposite PGE Corp and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGE Corp position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's long position.| PGE Corp vs. Consolidated Edison | PGE Corp vs. Southern Company | PGE Corp vs. Entergy | PGE Corp vs. Pinnacle West Capital |
| Safety Shot vs. The Coca Cola | Safety Shot vs. National Beverage Corp | Safety Shot vs. Keurig Dr Pepper | Safety Shot vs. Coca Cola Femsa SAB |
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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