Correlation Between Vestis and Nextera Energy
Can any of the company-specific risk be diversified away by investing in both Vestis and Nextera Energy 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 Vestis and Nextera Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestis and Nextera Energy, you can compare the effects of market volatilities on Vestis and Nextera 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 Vestis with a short position of Nextera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestis and Nextera Energy.
Diversification Opportunities for Vestis and Nextera Energy
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vestis and Nextera is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vestis and Nextera Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextera Energy and Vestis 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 Vestis are associated (or correlated) with Nextera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextera Energy has no effect on the direction of Vestis i.e., Vestis and Nextera Energy go up and down completely randomly.
Pair Corralation between Vestis and Nextera Energy
Given the investment horizon of 90 days Vestis is expected to generate 2.21 times more return on investment than Nextera Energy. However, Vestis is 2.21 times more volatile than Nextera Energy. It trades about 0.18 of its potential returns per unit of risk. Nextera Energy is currently generating about -0.17 per unit of risk. If you would invest 1,413 in Vestis on August 28, 2024 and sell it today you would earn a total of 218.00 from holding Vestis or generate 15.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestis vs. Nextera Energy
Performance |
| Timeline |
| Vestis |
| Nextera Energy |
Vestis and Nextera Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestis and Nextera Energy
The main advantage of trading using opposite Vestis and Nextera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestis position performs unexpectedly, Nextera 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 Nextera Energy will offset losses from the drop in Nextera Energy's long position.| Vestis vs. PROG Holdings | Vestis vs. McGrath RentCorp | Vestis vs. Mega Matrix Corp | Vestis vs. FTAI Aviation Ltd |
| Nextera Energy vs. Dominion Energy | Nextera Energy vs. Consolidated Edison | Nextera Energy vs. Eversource Energy | Nextera Energy vs. FirstEnergy |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |