Correlation Between Nextera Energy and Nexera Energy
Can any of the company-specific risk be diversified away by investing in both Nextera Energy and Nexera 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 Nextera Energy and Nexera Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextera Energy and Nexera Energy, you can compare the effects of market volatilities on Nextera Energy and Nexera 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 Nextera Energy with a short position of Nexera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextera Energy and Nexera Energy.
Diversification Opportunities for Nextera Energy and Nexera Energy
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nextera and Nexera is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nextera Energy and Nexera Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexera Energy and Nextera 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 Nextera Energy are associated (or correlated) with Nexera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexera Energy has no effect on the direction of Nextera Energy i.e., Nextera Energy and Nexera Energy go up and down completely randomly.
Pair Corralation between Nextera Energy and Nexera Energy
Considering the 90-day investment horizon Nextera Energy is expected to generate 0.16 times more return on investment than Nexera Energy. However, Nextera Energy is 6.3 times less risky than Nexera Energy. It trades about -0.02 of its potential returns per unit of risk. Nexera Energy is currently generating about -0.02 per unit of risk. If you would invest 7,449 in Nextera Energy on January 25, 2024 and sell it today you would lose (829.00) from holding Nextera Energy or give up 11.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nextera Energy vs. Nexera Energy
Performance |
Timeline |
Nextera Energy |
Nexera Energy |
Nextera Energy and Nexera Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nextera Energy and Nexera Energy
The main advantage of trading using opposite Nextera Energy and Nexera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextera Energy position performs unexpectedly, Nexera 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 Nexera Energy will offset losses from the drop in Nexera Energy's long position.Nextera Energy vs. Centrais Eltricas Brasileiras | Nextera Energy vs. Central Puerto SA | Nextera Energy vs. CMS Energy | Nextera Energy vs. Centrais Electricas Brasileiras |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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