Correlation Between AES and Just Energy

Can any of the company-specific risk be diversified away by investing in both AES and Just 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 AES and Just Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The AES and Just Energy Group, you can compare the effects of market volatilities on AES and Just 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 AES with a short position of Just Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and Just Energy.

Diversification Opportunities for AES and Just Energy

0.0

Correlation Coefficient

AES  Just Energy

Pay attention - limited upside

The 3 months correlation between AES and Just is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The AES and Just Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Just Energy Group and AES 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 The AES are associated (or correlated) with Just Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Just Energy Group has no effect on the direction of AES i.e., AES and Just Energy go up and down completely randomly.

Pair Corralation between AES and Just Energy

If you would invest  1,645  in The AES on January 25, 2024 and sell it today you would earn a total of  92.00  from holding The AES or generate 5.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

The AES  vs.  Just Energy Group

AES

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The AES are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, AES is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Just Energy Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Just Energy Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Just Energy is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AES and Just Energy

The main advantage of trading using opposite AES and Just Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES position performs unexpectedly, Just 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 Just Energy will offset losses from the drop in Just Energy's long position.

The idea behind The AES and Just Energy Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.