Correlation Between VivoPower International and Entergy Arkansas
Can any of the company-specific risk be diversified away by investing in both VivoPower International and Entergy Arkansas 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 VivoPower International and Entergy Arkansas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VivoPower International PLC and Entergy Arkansas LLC, you can compare the effects of market volatilities on VivoPower International and Entergy Arkansas 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 VivoPower International with a short position of Entergy Arkansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and Entergy Arkansas.
Diversification Opportunities for VivoPower International and Entergy Arkansas
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VivoPower and Entergy is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Entergy Arkansas LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy Arkansas LLC and VivoPower International 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 VivoPower International PLC are associated (or correlated) with Entergy Arkansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy Arkansas LLC has no effect on the direction of VivoPower International i.e., VivoPower International and Entergy Arkansas go up and down completely randomly.
Pair Corralation between VivoPower International and Entergy Arkansas
Given the investment horizon of 90 days VivoPower International PLC is expected to generate 51.14 times more return on investment than Entergy Arkansas. However, VivoPower International is 51.14 times more volatile than Entergy Arkansas LLC. It trades about 0.11 of its potential returns per unit of risk. Entergy Arkansas LLC is currently generating about -0.18 per unit of risk. If you would invest 140.00 in VivoPower International PLC on February 23, 2024 and sell it today you would earn a total of 197.00 from holding VivoPower International PLC or generate 140.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
VivoPower International PLC vs. Entergy Arkansas LLC
Performance |
Timeline |
VivoPower International |
Entergy Arkansas LLC |
VivoPower International and Entergy Arkansas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VivoPower International and Entergy Arkansas
The main advantage of trading using opposite VivoPower International and Entergy Arkansas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VivoPower International position performs unexpectedly, Entergy Arkansas 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 Entergy Arkansas will offset losses from the drop in Entergy Arkansas' long position.VivoPower International vs. iSun Inc | VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. SunPower |
Entergy Arkansas vs. Entergy Mississippi LLC | Entergy Arkansas vs. Entergy New Orleans | Entergy Arkansas vs. Entergy Louisiana LLC | Entergy Arkansas vs. Southern Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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