Correlation Between Utilities Fund and Hawaiian Electric
Can any of the company-specific risk be diversified away by investing in both Utilities Fund and Hawaiian Electric 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 Utilities Fund and Hawaiian Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Utilities Fund Class and Hawaiian Electric Industries, you can compare the effects of market volatilities on Utilities Fund and Hawaiian Electric 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 Utilities Fund with a short position of Hawaiian Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utilities Fund and Hawaiian Electric.
Diversification Opportunities for Utilities Fund and Hawaiian Electric
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Utilities and Hawaiian is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Utilities Fund Class and Hawaiian Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Electric and Utilities Fund 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 Utilities Fund Class are associated (or correlated) with Hawaiian Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Electric has no effect on the direction of Utilities Fund i.e., Utilities Fund and Hawaiian Electric go up and down completely randomly.
Pair Corralation between Utilities Fund and Hawaiian Electric
Assuming the 90 days horizon Utilities Fund Class is expected to under-perform the Hawaiian Electric. But the mutual fund apears to be less risky and, when comparing its historical volatility, Utilities Fund Class is 2.44 times less risky than Hawaiian Electric. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Hawaiian Electric Industries is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 997.00 in Hawaiian Electric Industries on September 12, 2024 and sell it today you would earn a total of 48.00 from holding Hawaiian Electric Industries or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Utilities Fund Class vs. Hawaiian Electric Industries
Performance |
| Timeline |
| Utilities Fund Class |
| Hawaiian Electric |
Utilities Fund and Hawaiian Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Utilities Fund and Hawaiian Electric
The main advantage of trading using opposite Utilities Fund and Hawaiian Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Utilities Fund position performs unexpectedly, Hawaiian Electric 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 Hawaiian Electric will offset losses from the drop in Hawaiian Electric's long position.| Utilities Fund vs. Alpine Dynamic Dividend | Utilities Fund vs. The Gabelli Utilities | Utilities Fund vs. The Gabelli Equity | Utilities Fund vs. Hennessy Gas Utility |
| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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