Correlation Between Public Service and Global Power
Can any of the company-specific risk be diversified away by investing in both Public Service and Global 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 Public Service and Global Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Service Enterprise and Global Power Equipment, you can compare the effects of market volatilities on Public Service and Global 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 Public Service with a short position of Global Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Service and Global Power.
Diversification Opportunities for Public Service and Global Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Public and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Public Service Enterprise and Global Power Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Power Equipment and Public Service 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 Public Service Enterprise are associated (or correlated) with Global Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Power Equipment has no effect on the direction of Public Service i.e., Public Service and Global Power go up and down completely randomly.
Pair Corralation between Public Service and Global Power
If you would invest 6,389 in Public Service Enterprise on January 20, 2024 and sell it today you would earn a total of 121.00 from holding Public Service Enterprise or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Public Service Enterprise vs. Global Power Equipment
Performance |
| Timeline |
| Public Service Enterprise |
| Global Power Equipment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Public Service and Global Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Service and Global Power
The main advantage of trading using opposite Public Service and Global Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Service position performs unexpectedly, Global 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 Global Power will offset losses from the drop in Global Power's long position.| Public Service vs. American Electric Power | Public Service vs. Nextera Energy | Public Service vs. Aquagold International | Public Service vs. Morningstar Unconstrained Allocation |
| Global Power vs. Fidus Investment Corp | Global Power vs. Blue Owl Capital | Global Power vs. China Aircraft Leasing | Global Power vs. HE Equipment Services |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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