Correlation Between Westar Energy and Southern
Can any of the company-specific risk be diversified away by investing in both Westar Energy and Southern 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 Westar Energy and Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westar Energy and Southern Company, you can compare the effects of market volatilities on Westar Energy and Southern 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 Westar Energy with a short position of Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westar Energy and Southern.
Diversification Opportunities for Westar Energy and Southern
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westar and Southern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westar Energy and Southern Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern and Westar 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 Westar Energy are associated (or correlated) with Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern has no effect on the direction of Westar Energy i.e., Westar Energy and Southern go up and down completely randomly.
Pair Corralation between Westar Energy and Southern
If you would invest 6,842 in Southern Company on January 25, 2024 and sell it today you would earn a total of 542.00 from holding Southern Company or generate 7.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Westar Energy vs. Southern Company
Performance |
Timeline |
Westar Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Southern |
Westar Energy and Southern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Westar Energy and Southern
The main advantage of trading using opposite Westar Energy and Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westar Energy position performs unexpectedly, Southern 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 Southern will offset losses from the drop in Southern's long position.Westar Energy vs. Sapiens International | Westar Energy vs. Definitive Healthcare Corp | Westar Energy vs. Boot Barn Holdings | Westar Energy vs. Pinterest |
Southern vs. Dominion Energy | Southern vs. American Electric Power | Southern vs. Nextera Energy | Southern vs. Consolidated Edison |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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