Correlation Between Consolidated Edison and Huaneng Power
Can any of the company-specific risk be diversified away by investing in both Consolidated Edison and Huaneng Power 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 Consolidated Edison and Huaneng Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Edison and Huaneng Power International, you can compare the effects of market volatilities on Consolidated Edison and Huaneng Power 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 Consolidated Edison with a short position of Huaneng Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Edison and Huaneng Power.
Diversification Opportunities for Consolidated Edison and Huaneng Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Consolidated and Huaneng is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Edison and Huaneng Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaneng Power Intern and Consolidated Edison 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 Consolidated Edison are associated (or correlated) with Huaneng Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaneng Power Intern has no effect on the direction of Consolidated Edison i.e., Consolidated Edison and Huaneng Power go up and down completely randomly.
Pair Corralation between Consolidated Edison and Huaneng Power
If you would invest 8,745 in Consolidated Edison on January 26, 2024 and sell it today you would earn a total of 598.00 from holding Consolidated Edison or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Consolidated Edison vs. Huaneng Power International
Performance |
| Timeline |
| Consolidated Edison |
| Huaneng Power Intern |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Consolidated Edison and Huaneng Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Edison and Huaneng Power
The main advantage of trading using opposite Consolidated Edison and Huaneng Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Edison position performs unexpectedly, Huaneng Power 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 Huaneng Power will offset losses from the drop in Huaneng Power's long position.| Consolidated Edison vs. Southern Company | Consolidated Edison vs. American Electric Power | Consolidated Edison vs. Nextera Energy | Consolidated Edison vs. Duke Energy |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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