Correlation Between OGE Energy and Portland General

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

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

Diversification Opportunities for OGE Energy and Portland General

0.0

Correlation Coefficient

OGE Energy  Portland General

Pay attention - limited upside

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

Pair Corralation between OGE Energy and Portland General

Considering the 90-day investment horizon OGE Energy is expected to generate 1.07 times more return on investment than Portland General. However, OGE Energy is 1.07 times more volatile than Portland General Electric. It trades about 0.18 of its potential returns per unit of risk. Portland General Electric is currently generating about 0.01 per unit of risk. If you would invest  3,929  in OGE Energy on August 31, 2024 and sell it today you would earn a total of  479.00  from holding OGE Energy or generate 12.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

OGE Energy  vs.  Portland General Electric

OGE Energy

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OGE Energy are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, OGE Energy may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Portland General Electric

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Portland General Electric has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Portland General is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with OGE Energy and Portland General

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

The idea behind OGE Energy and Portland General Electric 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.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.