Correlation Between Spire and Hawaiian Electric
Can any of the company-specific risk be diversified away by investing in both Spire 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 Spire and Hawaiian Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Inc and Hawaiian Electric Industries, you can compare the effects of market volatilities on Spire 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 Spire with a short position of Hawaiian Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire and Hawaiian Electric.
Diversification Opportunities for Spire and Hawaiian Electric
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Spire and Hawaiian is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Spire Inc and Hawaiian Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Electric and Spire 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 Spire Inc 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 Spire i.e., Spire and Hawaiian Electric go up and down completely randomly.
Pair Corralation between Spire and Hawaiian Electric
Allowing for the 90-day total investment horizon Spire Inc is expected to generate 0.26 times more return on investment than Hawaiian Electric. However, Spire Inc is 3.79 times less risky than Hawaiian Electric. It trades about 0.03 of its potential returns per unit of risk. Hawaiian Electric Industries is currently generating about -0.03 per unit of risk. If you would invest 6,238 in Spire Inc on August 30, 2024 and sell it today you would earn a total of 1,073 from holding Spire Inc or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Inc vs. Hawaiian Electric Industries
Performance |
| Timeline |
| Spire Inc |
| Hawaiian Electric |
Spire and Hawaiian Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire and Hawaiian Electric
The main advantage of trading using opposite Spire and Hawaiian Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire 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.| Spire vs. Northwest Natural Gas | Spire vs. Chesapeake Utilities | Spire vs. One Gas | Spire vs. NewJersey Resources |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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