Correlation Between Public Service and IDACORP
Can any of the company-specific risk be diversified away by investing in both Public Service and IDACORP 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 Public Service and IDACORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Service and IDACORP, you can compare the effects of market volatilities on Public Service and IDACORP 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 Public Service with a short position of IDACORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Service and IDACORP.
Diversification Opportunities for Public Service and IDACORP
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Public and IDACORP is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Public Service and IDACORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDACORP and Public Service 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 Public Service are associated (or correlated) with IDACORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDACORP has no effect on the direction of Public Service i.e., Public Service and IDACORP go up and down completely randomly.
Pair Corralation between Public Service and IDACORP
Assuming the 90 days horizon Public Service is expected to under-perform the IDACORP. But the pink sheet apears to be less risky and, when comparing its historical volatility, Public Service is 1.02 times less risky than IDACORP. The pink sheet trades about -0.23 of its potential returns per unit of risk. The IDACORP is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 11,289 in IDACORP on October 11, 2024 and sell it today you would lose (246.00) from holding IDACORP or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Public Service vs. IDACORP
Performance |
| Timeline |
| Public Service |
| IDACORP |
Public Service and IDACORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Service and IDACORP
The main advantage of trading using opposite Public Service and IDACORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Service position performs unexpectedly, IDACORP 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 IDACORP will offset losses from the drop in IDACORP's long position.| Public Service vs. WK Kellogg Co | Public Service vs. Copperbank Resources Corp | Public Service vs. Astral Foods Limited | Public Service vs. Ingredion Incorporated |
| IDACORP vs. CMS Energy | IDACORP vs. Pinnacle West Capital | IDACORP vs. Alliant Energy Corp | IDACORP vs. Portland General Electric |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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