Correlation Between Consolidated Edison and Excelerate Energy
Can any of the company-specific risk be diversified away by investing in both Consolidated Edison and Excelerate 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 Consolidated Edison and Excelerate Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Edison and Excelerate Energy, you can compare the effects of market volatilities on Consolidated Edison and Excelerate 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 Consolidated Edison with a short position of Excelerate Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Edison and Excelerate Energy.
Diversification Opportunities for Consolidated Edison and Excelerate Energy
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Consolidated and Excelerate is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Edison and Excelerate Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelerate Energy 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 Excelerate Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelerate Energy has no effect on the direction of Consolidated Edison i.e., Consolidated Edison and Excelerate Energy go up and down completely randomly.
Pair Corralation between Consolidated Edison and Excelerate Energy
Allowing for the 90-day total investment horizon Consolidated Edison is expected to generate 0.59 times more return on investment than Excelerate Energy. However, Consolidated Edison is 1.7 times less risky than Excelerate Energy. It trades about 0.11 of its potential returns per unit of risk. Excelerate Energy is currently generating about 0.03 per unit of risk. If you would invest 8,904 in Consolidated Edison on January 20, 2024 and sell it today you would earn a total of 273.00 from holding Consolidated Edison or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Edison vs. Excelerate Energy
Performance |
| Timeline |
| Consolidated Edison |
| Excelerate Energy |
Consolidated Edison and Excelerate Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Edison and Excelerate Energy
The main advantage of trading using opposite Consolidated Edison and Excelerate Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Edison position performs unexpectedly, Excelerate 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 Excelerate Energy will offset losses from the drop in Excelerate Energy's long position.| Consolidated Edison vs. American Electric Power | Consolidated Edison vs. Nextera Energy | Consolidated Edison vs. Aquagold International | Consolidated Edison vs. Morningstar Unconstrained Allocation |
| Excelerate Energy vs. Atlantica Sustainable Infrastructure | Excelerate Energy vs. Clearway Energy | Excelerate Energy vs. Brookfield Renewable Corp | Excelerate Energy vs. Nextera Energy Partners |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |