Correlation Between Portland General and OGE Energy
Can any of the company-specific risk be diversified away by investing in both Portland General and OGE 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 OGE 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 OGE Energy, you can compare the effects of market volatilities on Portland General and OGE 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 OGE Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Portland General and OGE Energy.
Diversification Opportunities for Portland General and OGE Energy
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Portland and OGE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Portland General Electric and OGE Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OGE 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 OGE Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OGE Energy has no effect on the direction of Portland General i.e., Portland General and OGE Energy go up and down completely randomly.
Pair Corralation between Portland General and OGE Energy
Considering the 90-day investment horizon Portland General Electric is expected to under-perform the OGE Energy. But the stock apears to be less risky and, when comparing its historical volatility, Portland General Electric is 1.21 times less risky than OGE Energy. The stock trades about -0.04 of its potential returns per unit of risk. The OGE Energy is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,065 in OGE Energy on August 27, 2024 and sell it today you would earn a total of 320.00 from holding OGE Energy or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Portland General Electric vs. OGE Energy
Performance |
| Timeline |
| Portland General Electric |
| OGE Energy |
Portland General and OGE Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Portland General and OGE Energy
The main advantage of trading using opposite Portland General and OGE Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Portland General position performs unexpectedly, OGE 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 OGE Energy will offset losses from the drop in OGE Energy's long position.| Portland General vs. Dominion Energy | Portland General vs. Consolidated Edison | Portland General vs. Eversource Energy | Portland General vs. FirstEnergy |
| OGE Energy vs. Alliant Energy Corp | OGE Energy vs. CMS Energy | OGE Energy vs. CenterPoint Energy | OGE Energy vs. Pinnacle West Capital |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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