Correlation Between UGE International and Constellation Energy
Can any of the company-specific risk be diversified away by investing in both UGE International and Constellation Energy 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 UGE International and Constellation Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UGE International and Constellation Energy Corp, you can compare the effects of market volatilities on UGE International and Constellation Energy 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 UGE International with a short position of Constellation Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of UGE International and Constellation Energy.
Diversification Opportunities for UGE International and Constellation Energy
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UGE and Constellation is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding UGE International and Constellation Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Energy Corp and UGE International 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 UGE International are associated (or correlated) with Constellation Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Energy Corp has no effect on the direction of UGE International i.e., UGE International and Constellation Energy go up and down completely randomly.
Pair Corralation between UGE International and Constellation Energy
Assuming the 90 days horizon UGE International is expected to generate 4.23 times more return on investment than Constellation Energy. However, UGE International is 4.23 times more volatile than Constellation Energy Corp. It trades about 0.03 of its potential returns per unit of risk. Constellation Energy Corp is currently generating about 0.09 per unit of risk. If you would invest 109.00 in UGE International on August 28, 2024 and sell it today you would earn a total of 37.00 from holding UGE International or generate 33.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.26% |
| Values | Daily Returns |
UGE International vs. Constellation Energy Corp
Performance |
| Timeline |
| UGE International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Constellation Energy Corp |
UGE International and Constellation Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UGE International and Constellation Energy
The main advantage of trading using opposite UGE International and Constellation Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UGE International position performs unexpectedly, Constellation Energy 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 Constellation Energy will offset losses from the drop in Constellation Energy's long position.| UGE International vs. Fortum Oyj ADR | UGE International vs. Astra Energy | UGE International vs. Powertap Hydrogen Capital | UGE International vs. Brenmiller Energy Ltd |
| Constellation Energy vs. Atlantica Sustainable Infrastructure | Constellation Energy vs. Clearway Energy | Constellation Energy vs. Brookfield Renewable Corp | Constellation Energy vs. Nextera Energy Partners |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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