Correlation Between UGE International and Nextera Energy
Can any of the company-specific risk be diversified away by investing in both UGE International and Nextera 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 Nextera 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 Nextera Energy Partners, you can compare the effects of market volatilities on UGE International and Nextera 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 Nextera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of UGE International and Nextera Energy.
Diversification Opportunities for UGE International and Nextera Energy
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UGE and Nextera is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding UGE International and Nextera Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextera Energy Partners 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 Nextera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextera Energy Partners has no effect on the direction of UGE International i.e., UGE International and Nextera Energy go up and down completely randomly.
Pair Corralation between UGE International and Nextera Energy
If you would invest 146.00 in UGE International on November 4, 2024 and sell it today you would earn a total of 0.00 from holding UGE International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
UGE International vs. Nextera Energy Partners
Performance |
| Timeline |
| UGE International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nextera Energy Partners |
UGE International and Nextera Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UGE International and Nextera Energy
The main advantage of trading using opposite UGE International and Nextera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UGE International position performs unexpectedly, Nextera 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 Nextera Energy will offset losses from the drop in Nextera 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 |
| Nextera Energy vs. Brookfield Renewable Corp | Nextera Energy vs. Algonquin Power Utilities | Nextera Energy vs. Clearway Energy Class | Nextera Energy vs. Clearway 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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