Correlation Between Adobe and CenterPoint Energy
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By analyzing existing cross correlation between Adobe 23 percent and CenterPoint Energy, you can compare the effects of market volatilities on Adobe and CenterPoint 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 Adobe with a short position of CenterPoint Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adobe and CenterPoint Energy.
Diversification Opportunities for Adobe and CenterPoint Energy
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Adobe and CenterPoint is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Adobe 23 percent and CenterPoint Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CenterPoint Energy and Adobe 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 Adobe 23 percent are associated (or correlated) with CenterPoint Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CenterPoint Energy has no effect on the direction of Adobe i.e., Adobe and CenterPoint Energy go up and down completely randomly.
Pair Corralation between Adobe and CenterPoint Energy
Assuming the 90 days trading horizon Adobe 23 percent is expected to under-perform the CenterPoint Energy. But the bond apears to be less risky and, when comparing its historical volatility, Adobe 23 percent is 1.54 times less risky than CenterPoint Energy. The bond trades about -0.1 of its potential returns per unit of risk. The CenterPoint Energy is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,024 in CenterPoint Energy on September 13, 2024 and sell it today you would earn a total of 117.00 from holding CenterPoint Energy or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Adobe 23 percent vs. CenterPoint Energy
Performance |
| Timeline |
| Adobe 23 percent |
| CenterPoint Energy |
Adobe and CenterPoint Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adobe and CenterPoint Energy
The main advantage of trading using opposite Adobe and CenterPoint Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adobe position performs unexpectedly, CenterPoint 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 CenterPoint Energy will offset losses from the drop in CenterPoint Energy's long position.The idea behind Adobe 23 percent and CenterPoint Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CenterPoint Energy vs. Duke Energy | CenterPoint Energy vs. American Electric Power | CenterPoint Energy vs. Nextera Energy | CenterPoint Energy vs. Southern Company |
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 Stocks Directory module to find actively traded stocks across global markets.
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