Two Equities Correlation Analysis
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Dominion Energy and NYSE Composite
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dominion and NYSE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dominion Energy and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Dominion Energy 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 Dominion Energy are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Dominion Energy i.e., Dominion Energy and NYSE Composite go up and down completely randomly.
Pair Corralation between Dominion Energy and NYSE Composite
Taking into account the 90-day investment horizon Dominion Energy is expected to generate 1.07 times less return on investment than NYSE Composite. In addition to that, Dominion Energy is 4.61 times more volatile than NYSE Composite. It trades about 0.07 of its total potential returns per unit of risk. NYSE Composite is currently generating about 0.34 per unit of volatility. If you would invest 1,759,832 in NYSE Composite on December 29, 2023 and sell it today you would earn a total of 65,692 from holding NYSE Composite or generate 3.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dominion Energy vs. NYSE Composite
Performance |
Timeline |
Dominion Energy and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Dominion Energy
Pair trading matchups for Dominion Energy
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Dominion Energy and NYSE Composite
The main advantage of trading using opposite Dominion Energy and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominion Energy position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Dominion Energy vs. Eversource Energy | Dominion Energy vs. FirstEnergy | Dominion Energy vs. Hawaiian Electric Industries | Dominion Energy vs. Southern Company |
NYSE Composite vs. SNDL Inc | NYSE Composite vs. Village Super Market | NYSE Composite vs. CF Industries Holdings | NYSE Composite vs. Albertsons Companies |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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