Correlation Between UNITIL and AES Corp
Can any of the company-specific risk be diversified away by investing in both UNITIL and AES Corp 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 UNITIL and AES Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITIL and AES Corp Unit, you can compare the effects of market volatilities on UNITIL and AES 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 UNITIL with a short position of AES Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITIL and AES Corp.
Diversification Opportunities for UNITIL and AES Corp
Weak diversification
The 3 months correlation between UNITIL and AES is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding UNITIL and AES Corp Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES Corp Unit and UNITIL 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 UNITIL are associated (or correlated) with AES Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES Corp Unit has no effect on the direction of UNITIL i.e., UNITIL and AES Corp go up and down completely randomly.
Pair Corralation between UNITIL and AES Corp
If you would invest 5,856 in UNITIL on August 28, 2024 and sell it today you would earn a total of 207.00 from holding UNITIL or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
UNITIL vs. AES Corp Unit
Performance |
| Timeline |
| UNITIL |
| AES Corp Unit |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
UNITIL and AES Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITIL and AES Corp
The main advantage of trading using opposite UNITIL and AES Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITIL position performs unexpectedly, AES 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 AES Corp will offset losses from the drop in AES Corp's long position.The idea behind UNITIL and AES Corp Unit 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.| AES Corp vs. Alta Equipment Group | AES Corp vs. Lendlease Global Commercial | AES Corp vs. Sphere Entertainment Co | AES Corp vs. U Haul Holding |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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