Correlation Between RWE AG and Commerce Energy
Can any of the company-specific risk be diversified away by investing in both RWE AG and Commerce 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 RWE AG and Commerce Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RWE AG PK and Commerce Energy Group, you can compare the effects of market volatilities on RWE AG and Commerce 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 RWE AG with a short position of Commerce Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of RWE AG and Commerce Energy.
Diversification Opportunities for RWE AG and Commerce Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RWE and Commerce is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RWE AG PK and Commerce Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Energy Group and RWE AG 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 RWE AG PK are associated (or correlated) with Commerce Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Energy Group has no effect on the direction of RWE AG i.e., RWE AG and Commerce Energy go up and down completely randomly.
Pair Corralation between RWE AG and Commerce Energy
If you would invest 3,242 in RWE AG PK on February 23, 2024 and sell it today you would earn a total of 513.00 from holding RWE AG PK or generate 15.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 1.59% |
Values | Daily Returns |
RWE AG PK vs. Commerce Energy Group
Performance |
Timeline |
RWE AG PK |
Commerce Energy Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
RWE AG and Commerce Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RWE AG and Commerce Energy
The main advantage of trading using opposite RWE AG and Commerce Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RWE AG position performs unexpectedly, Commerce 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 Commerce Energy will offset losses from the drop in Commerce Energy's long position.RWE AG vs. ENEL Societa per | RWE AG vs. Companhia Paranaense de | RWE AG vs. Iberdrola SA | RWE AG vs. Companhia Energetica de |
Commerce Energy vs. Canadian Utilities Limited | Commerce Energy vs. RWE AG PK | Commerce Energy vs. Companhia Energetica de |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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