Correlation Between TRADEDOUBLER and Consolidated Edison
Can any of the company-specific risk be diversified away by investing in both TRADEDOUBLER and Consolidated Edison 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 TRADEDOUBLER and Consolidated Edison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEDOUBLER AB SK and Consolidated Edison, you can compare the effects of market volatilities on TRADEDOUBLER and Consolidated Edison 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 TRADEDOUBLER with a short position of Consolidated Edison. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and Consolidated Edison.
Diversification Opportunities for TRADEDOUBLER and Consolidated Edison
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRADEDOUBLER and Consolidated is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and Consolidated Edison in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Edison and TRADEDOUBLER 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 TRADEDOUBLER AB SK are associated (or correlated) with Consolidated Edison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Edison has no effect on the direction of TRADEDOUBLER i.e., TRADEDOUBLER and Consolidated Edison go up and down completely randomly.
Pair Corralation between TRADEDOUBLER and Consolidated Edison
Assuming the 90 days horizon TRADEDOUBLER AB SK is expected to under-perform the Consolidated Edison. In addition to that, TRADEDOUBLER is 1.53 times more volatile than Consolidated Edison. It trades about -0.05 of its total potential returns per unit of risk. Consolidated Edison is currently generating about 0.08 per unit of volatility. If you would invest 8,648 in Consolidated Edison on November 4, 2024 and sell it today you would earn a total of 232.00 from holding Consolidated Edison or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
TRADEDOUBLER AB SK vs. Consolidated Edison
Performance |
| Timeline |
| TRADEDOUBLER AB SK |
| Consolidated Edison |
TRADEDOUBLER and Consolidated Edison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEDOUBLER and Consolidated Edison
The main advantage of trading using opposite TRADEDOUBLER and Consolidated Edison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER position performs unexpectedly, Consolidated Edison 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 Consolidated Edison will offset losses from the drop in Consolidated Edison's long position.| TRADEDOUBLER vs. Haverty Furniture Companies | TRADEDOUBLER vs. Focus Home Interactive | TRADEDOUBLER vs. Fuji Media Holdings | TRADEDOUBLER vs. Melco Resorts Entertainment |
| Consolidated Edison vs. Planet Fitness | Consolidated Edison vs. Molina Healthcare | Consolidated Edison vs. Ultra Clean Holdings | Consolidated Edison vs. Canon Marketing Japan |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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