Correlation Between PacifiCorp and Connecticut Light
Can any of the company-specific risk be diversified away by investing in both PacifiCorp and Connecticut Light 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 PacifiCorp and Connecticut Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacifiCorp and The Connecticut Light, you can compare the effects of market volatilities on PacifiCorp and Connecticut Light 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 PacifiCorp with a short position of Connecticut Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacifiCorp and Connecticut Light.
Diversification Opportunities for PacifiCorp and Connecticut Light
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between PacifiCorp and Connecticut is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding PacifiCorp and The Connecticut Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connecticut Light and PacifiCorp 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 PacifiCorp are associated (or correlated) with Connecticut Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connecticut Light has no effect on the direction of PacifiCorp i.e., PacifiCorp and Connecticut Light go up and down completely randomly.
Pair Corralation between PacifiCorp and Connecticut Light
Assuming the 90 days horizon PacifiCorp is expected to under-perform the Connecticut Light. In addition to that, PacifiCorp is 2.41 times more volatile than The Connecticut Light. It trades about -0.05 of its total potential returns per unit of risk. The Connecticut Light is currently generating about 0.03 per unit of volatility. If you would invest 4,988 in The Connecticut Light on November 27, 2024 and sell it today you would earn a total of 267.00 from holding The Connecticut Light or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 52.26% |
| Values | Daily Returns |
PacifiCorp vs. The Connecticut Light
Performance |
| Timeline |
| PacifiCorp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Connecticut Light |
PacifiCorp and Connecticut Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacifiCorp and Connecticut Light
The main advantage of trading using opposite PacifiCorp and Connecticut Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacifiCorp position performs unexpectedly, Connecticut Light 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 Connecticut Light will offset losses from the drop in Connecticut Light's long position.| PacifiCorp vs. NetEase | PacifiCorp vs. EastGroup Properties | PacifiCorp vs. Galaxy Gaming | PacifiCorp vs. Hurco Companies |
| Connecticut Light vs. The Connecticut Light | Connecticut Light vs. The Connecticut Light | Connecticut Light vs. The Connecticut Light | Connecticut Light vs. The Connecticut Light |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |