Correlation Between ENTERPRISE and CenterPoint Energy
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By analyzing existing cross correlation between ENTERPRISE PRODS OPER and CenterPoint Energy, you can compare the effects of market volatilities on ENTERPRISE 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 ENTERPRISE with a short position of CenterPoint Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENTERPRISE and CenterPoint Energy.
Diversification Opportunities for ENTERPRISE and CenterPoint Energy
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between ENTERPRISE and CenterPoint is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ENTERPRISE PRODS OPER and CenterPoint Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CenterPoint Energy and ENTERPRISE 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 ENTERPRISE PRODS OPER 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 ENTERPRISE i.e., ENTERPRISE and CenterPoint Energy go up and down completely randomly.
Pair Corralation between ENTERPRISE and CenterPoint Energy
Assuming the 90 days trading horizon ENTERPRISE is expected to generate 6.68 times less return on investment than CenterPoint Energy. But when comparing it to its historical volatility, ENTERPRISE PRODS OPER is 1.12 times less risky than CenterPoint Energy. It trades about 0.06 of its potential returns per unit of risk. CenterPoint Energy is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 2,933 in CenterPoint Energy on September 1, 2024 and sell it today you would earn a total of 329.00 from holding CenterPoint Energy or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
ENTERPRISE PRODS OPER vs. CenterPoint Energy
Performance |
| Timeline |
| ENTERPRISE PRODS OPER |
| CenterPoint Energy |
ENTERPRISE and CenterPoint Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENTERPRISE and CenterPoint Energy
The main advantage of trading using opposite ENTERPRISE and CenterPoint Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENTERPRISE 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.| ENTERPRISE vs. East Africa Metals | ENTERPRISE vs. Vistra Energy Corp | ENTERPRISE vs. Antero Midstream Partners | ENTERPRISE vs. CenterPoint Energy |
| CenterPoint Energy vs. DTE Energy | CenterPoint Energy vs. Alliant Energy Corp | CenterPoint Energy vs. Ameren Corp | CenterPoint Energy vs. Pinnacle West Capital |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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