Correlation Between Entergy and SPORTING
Can any of the company-specific risk be diversified away by investing in both Entergy and SPORTING 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 Entergy and SPORTING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entergy and SPORTING, you can compare the effects of market volatilities on Entergy and SPORTING 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 Entergy with a short position of SPORTING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entergy and SPORTING.
Diversification Opportunities for Entergy and SPORTING
Average diversification
The 3 months correlation between Entergy and SPORTING is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Entergy and SPORTING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORTING and Entergy 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 Entergy are associated (or correlated) with SPORTING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORTING has no effect on the direction of Entergy i.e., Entergy and SPORTING go up and down completely randomly.
Pair Corralation between Entergy and SPORTING
Assuming the 90 days horizon Entergy is expected to generate 1.85 times more return on investment than SPORTING. However, Entergy is 1.85 times more volatile than SPORTING. It trades about 0.17 of its potential returns per unit of risk. SPORTING is currently generating about 0.05 per unit of risk. If you would invest 5,602 in Entergy on September 25, 2024 and sell it today you would earn a total of 1,548 from holding Entergy or generate 27.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Entergy vs. SPORTING
Performance |
Timeline |
Entergy |
SPORTING |
Entergy and SPORTING Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Entergy and SPORTING
The main advantage of trading using opposite Entergy and SPORTING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entergy position performs unexpectedly, SPORTING 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 SPORTING will offset losses from the drop in SPORTING's long position.Entergy vs. SPORTING | Entergy vs. Columbia Sportswear | Entergy vs. JD SPORTS FASH | Entergy vs. Computer And Technologies |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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