Correlation Between Vast Renewables and Exelon
Can any of the company-specific risk be diversified away by investing in both Vast Renewables and Exelon 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 Vast Renewables and Exelon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vast Renewables Limited and Exelon, you can compare the effects of market volatilities on Vast Renewables and Exelon 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 Vast Renewables with a short position of Exelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vast Renewables and Exelon.
Diversification Opportunities for Vast Renewables and Exelon
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vast and Exelon is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Vast Renewables Limited and Exelon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelon and Vast 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 Vast Renewables Limited are associated (or correlated) with Exelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelon has no effect on the direction of Vast Renewables i.e., Vast Renewables and Exelon go up and down completely randomly.
Pair Corralation between Vast Renewables and Exelon
Given the investment horizon of 90 days Vast Renewables Limited is expected to generate 30.19 times more return on investment than Exelon. However, Vast Renewables is 30.19 times more volatile than Exelon. It trades about 0.1 of its potential returns per unit of risk. Exelon is currently generating about 0.03 per unit of risk. If you would invest 227.00 in Vast Renewables Limited on August 31, 2024 and sell it today you would lose (20.00) from holding Vast Renewables Limited or give up 8.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vast Renewables Limited vs. Exelon
Performance |
| Timeline |
| Vast Renewables |
| Exelon |
Vast Renewables and Exelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vast Renewables and Exelon
The main advantage of trading using opposite Vast Renewables and Exelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vast Renewables position performs unexpectedly, Exelon 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 Exelon will offset losses from the drop in Exelon's long position.| Vast Renewables vs. Dominion Energy | Vast Renewables vs. Consolidated Edison | Vast Renewables vs. Eversource Energy | Vast Renewables vs. FirstEnergy |
| Exelon vs. Duke Energy | Exelon vs. Dominion Energy | Exelon vs. Southern Company | Exelon vs. Consolidated Edison |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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