Correlation Between GENERAL and PGE Corp
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By analyzing existing cross correlation between GENERAL ELEC CAP and PGE Corp, you can compare the effects of market volatilities on GENERAL and PGE Corp 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 GENERAL with a short position of PGE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENERAL and PGE Corp.
Diversification Opportunities for GENERAL and PGE Corp
Average diversification
The 3 months correlation between GENERAL and PGE is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding GENERAL ELEC CAP and PGE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGE Corp and GENERAL 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 GENERAL ELEC CAP are associated (or correlated) with PGE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGE Corp has no effect on the direction of GENERAL i.e., GENERAL and PGE Corp go up and down completely randomly.
Pair Corralation between GENERAL and PGE Corp
Assuming the 90 days trading horizon GENERAL ELEC CAP is expected to under-perform the PGE Corp. In addition to that, GENERAL is 1.5 times more volatile than PGE Corp. It trades about -0.15 of its total potential returns per unit of risk. PGE Corp is currently generating about 0.17 per unit of volatility. If you would invest 2,051 in PGE Corp on August 28, 2024 and sell it today you would earn a total of 68.00 from holding PGE Corp or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 59.09% |
| Values | Daily Returns |
GENERAL ELEC CAP vs. PGE Corp
Performance |
| Timeline |
| GENERAL ELEC CAP |
| PGE Corp |
GENERAL and PGE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GENERAL and PGE Corp
The main advantage of trading using opposite GENERAL and PGE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENERAL position performs unexpectedly, PGE Corp 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 PGE Corp will offset losses from the drop in PGE Corp's long position.| GENERAL vs. Integral Ad Science | GENERAL vs. WPP PLC ADR | GENERAL vs. Radcom | GENERAL vs. Sphere Entertainment Co |
| PGE Corp vs. Consolidated Edison | PGE Corp vs. Southern Company | PGE Corp vs. Entergy | PGE Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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