Correlation Between Portland General and Consumers Energy
Can any of the company-specific risk be diversified away by investing in both Portland General and Consumers Energy 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 Portland General and Consumers Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Portland General Electric and Consumers Energy, you can compare the effects of market volatilities on Portland General and Consumers Energy 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 Portland General with a short position of Consumers Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Portland General and Consumers Energy.
Diversification Opportunities for Portland General and Consumers Energy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Portland and Consumers is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Portland General Electric and Consumers Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumers Energy and Portland General 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 Portland General Electric are associated (or correlated) with Consumers Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumers Energy has no effect on the direction of Portland General i.e., Portland General and Consumers Energy go up and down completely randomly.
Pair Corralation between Portland General and Consumers Energy
Considering the 90-day investment horizon Portland General Electric is expected to under-perform the Consumers Energy. But the stock apears to be less risky and, when comparing its historical volatility, Portland General Electric is 1.12 times less risky than Consumers Energy. The stock trades about -0.13 of its potential returns per unit of risk. The Consumers Energy is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 8,235 in Consumers Energy on November 1, 2024 and sell it today you would lose (524.00) from holding Consumers Energy or give up 6.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Portland General Electric vs. Consumers Energy
Performance |
| Timeline |
| Portland General Electric |
| Consumers Energy |
Portland General and Consumers Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Portland General and Consumers Energy
The main advantage of trading using opposite Portland General and Consumers Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Portland General position performs unexpectedly, Consumers Energy 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 Consumers Energy will offset losses from the drop in Consumers Energy's long position.| Portland General vs. MGE Energy | Portland General vs. CMS Energy | Portland General vs. OGE Energy | Portland General vs. DTE Energy |
| Consumers Energy vs. Nextera Energy | Consumers Energy vs. Duke Energy | Consumers Energy vs. PGE Corp | Consumers Energy vs. Southern Company |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |