Correlation Between Arrow Financial and Edison International
Can any of the company-specific risk be diversified away by investing in both Arrow Financial and Edison International 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 Arrow Financial and Edison International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Financial and Edison International, you can compare the effects of market volatilities on Arrow Financial and Edison International 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 Arrow Financial with a short position of Edison International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Financial and Edison International.
Diversification Opportunities for Arrow Financial and Edison International
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Edison is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Financial and Edison International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edison International and Arrow Financial 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 Arrow Financial are associated (or correlated) with Edison International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edison International has no effect on the direction of Arrow Financial i.e., Arrow Financial and Edison International go up and down completely randomly.
Pair Corralation between Arrow Financial and Edison International
Given the investment horizon of 90 days Arrow Financial is expected to generate 1.52 times more return on investment than Edison International. However, Arrow Financial is 1.52 times more volatile than Edison International. It trades about 0.08 of its potential returns per unit of risk. Edison International is currently generating about -0.08 per unit of risk. If you would invest 3,007 in Arrow Financial on September 10, 2025 and sell it today you would earn a total of 88.00 from holding Arrow Financial or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Financial vs. Edison International
Performance |
| Timeline |
| Arrow Financial |
| Edison International |
Arrow Financial and Edison International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Financial and Edison International
The main advantage of trading using opposite Arrow Financial and Edison International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Financial position performs unexpectedly, Edison International 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 Edison International will offset losses from the drop in Edison International's long position.| Arrow Financial vs. Bar Harbor Bankshares | Arrow Financial vs. ACNB Corporation | Arrow Financial vs. Farmers National Banc | Arrow Financial vs. Northrim BanCorp |
| Edison International vs. CMS Energy | Edison International vs. Centrais Eltricas Brasileiras | Edison International vs. Korea Electric Power | Edison International vs. Evergy, |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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