Correlation Between Power Financial and Power Financial
Can any of the company-specific risk be diversified away by investing in both Power Financial and Power Financial 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 Power Financial and Power Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Financial Corp and Power Financial 51, you can compare the effects of market volatilities on Power Financial and Power Financial 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 Power Financial with a short position of Power Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Financial and Power Financial.
Diversification Opportunities for Power Financial and Power Financial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Power and Power is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Power Financial Corp and Power Financial 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Financial 51 and Power Financial 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 Power Financial Corp are associated (or correlated) with Power Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Financial 51 has no effect on the direction of Power Financial i.e., Power Financial and Power Financial go up and down completely randomly.
Pair Corralation between Power Financial and Power Financial
Assuming the 90 days trading horizon Power Financial Corp is expected to generate 1.09 times more return on investment than Power Financial. However, Power Financial is 1.09 times more volatile than Power Financial 51. It trades about -0.1 of its potential returns per unit of risk. Power Financial 51 is currently generating about -0.15 per unit of risk. If you would invest 2,016 in Power Financial Corp on August 29, 2024 and sell it today you would lose (38.00) from holding Power Financial Corp or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Financial Corp vs. Power Financial 51
Performance |
| Timeline |
| Power Financial Corp |
| Power Financial 51 |
Power Financial and Power Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Financial and Power Financial
The main advantage of trading using opposite Power Financial and Power Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Financial position performs unexpectedly, Power Financial 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 Power Financial will offset losses from the drop in Power Financial's long position.| Power Financial vs. Manulife Financial Corp | Power Financial vs. Great West Lifeco | Power Financial vs. Great West Lifeco |
| Power Financial vs. Manulife Financial Corp | Power Financial vs. Great West Lifeco | Power Financial vs. Great West Lifeco |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stocks Directory Find actively traded stocks across global markets |