Correlation Between United States and Reaves Utility

Can any of the company-specific risk be diversified away by investing in both United States and Reaves Utility 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 United States and Reaves Utility into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between United States Cellular and Reaves Utility If, you can compare the effects of market volatilities on United States and Reaves Utility 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 United States with a short position of Reaves Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Reaves Utility.

Diversification Opportunities for United States and Reaves Utility

0.9

Correlation Coefficient

United States  Reaves Utility

Almost no diversification

The 3 months correlation between United and Reaves is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding United States Cellular and Reaves Utility If in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reaves Utility If and United States 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 United States Cellular are associated (or correlated) with Reaves Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reaves Utility If has no effect on the direction of United States i.e., United States and Reaves Utility go up and down completely randomly.

Pair Corralation between United States and Reaves Utility

Considering the 90-day investment horizon United States is expected to generate 1.76 times less return on investment than Reaves Utility. But when comparing it to its historical volatility, United States Cellular is 1.66 times less risky than Reaves Utility. It trades about 0.27 of its potential returns per unit of risk. Reaves Utility If is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  2,954  in Reaves Utility If on August 30, 2024 and sell it today you would earn a total of  545.00  from holding Reaves Utility If or generate 18.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

United States Cellular  vs.  Reaves Utility If

United States Cellular

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United States Cellular are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, United States may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Reaves Utility If

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Reaves Utility If are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly weak basic indicators, Reaves Utility reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United States and Reaves Utility

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

The idea behind United States Cellular and Reaves Utility If 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 Commodity Directory module to find actively traded commodities issued by global exchanges.