Correlation Between Via Renewables and Madison Investors
Can any of the company-specific risk be diversified away by investing in both Via Renewables and Madison Investors 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 Via Renewables and Madison Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Via Renewables and Madison Investors Fund, you can compare the effects of market volatilities on Via Renewables and Madison Investors 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 Via Renewables with a short position of Madison Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and Madison Investors.
Diversification Opportunities for Via Renewables and Madison Investors
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Via and Madison is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Madison Investors Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Investors and Via Renewables 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 Via Renewables are associated (or correlated) with Madison Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Investors has no effect on the direction of Via Renewables i.e., Via Renewables and Madison Investors go up and down completely randomly.
Pair Corralation between Via Renewables and Madison Investors
Assuming the 90 days horizon Via Renewables is expected to generate 2.2 times more return on investment than Madison Investors. However, Via Renewables is 2.2 times more volatile than Madison Investors Fund. It trades about 0.05 of its potential returns per unit of risk. Madison Investors Fund is currently generating about 0.1 per unit of risk. If you would invest 1,746 in Via Renewables on September 2, 2024 and sell it today you would earn a total of 465.00 from holding Via Renewables or generate 26.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Via Renewables vs. Madison Investors Fund
Performance |
| Timeline |
| Via Renewables |
| Madison Investors |
Via Renewables and Madison Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Via Renewables and Madison Investors
The main advantage of trading using opposite Via Renewables and Madison Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables position performs unexpectedly, Madison Investors 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 Madison Investors will offset losses from the drop in Madison Investors' long position.| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
| Madison Investors vs. Madison Mid Cap | Madison Investors vs. Madison Moderate Allocation | Madison Investors vs. Madison Moderate Allocation | Madison Investors vs. Broadview Opportunity Fund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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