Correlation Between CenterPoint Energy and Exelon
Can any of the company-specific risk be diversified away by investing in both CenterPoint Energy and Exelon 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 CenterPoint Energy and Exelon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CenterPoint Energy and Exelon, you can compare the effects of market volatilities on CenterPoint Energy and Exelon 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 CenterPoint Energy with a short position of Exelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of CenterPoint Energy and Exelon.
Diversification Opportunities for CenterPoint Energy and Exelon
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CenterPoint and Exelon is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CenterPoint Energy and Exelon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelon and CenterPoint 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 CenterPoint Energy are associated (or correlated) with Exelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelon has no effect on the direction of CenterPoint Energy i.e., CenterPoint Energy and Exelon go up and down completely randomly.
Pair Corralation between CenterPoint Energy and Exelon
Considering the 90-day investment horizon CenterPoint Energy is expected to generate 1.03 times less return on investment than Exelon. In addition to that, CenterPoint Energy is 1.08 times more volatile than Exelon. It trades about 0.14 of its total potential returns per unit of risk. Exelon is currently generating about 0.15 per unit of volatility. If you would invest 4,305 in Exelon on July 13, 2025 and sell it today you would earn a total of 402.00 from holding Exelon or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CenterPoint Energy vs. Exelon
Performance |
| Timeline |
| CenterPoint Energy |
| Exelon |
CenterPoint Energy and Exelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CenterPoint Energy and Exelon
The main advantage of trading using opposite CenterPoint Energy and Exelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CenterPoint Energy position performs unexpectedly, Exelon 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 Exelon will offset losses from the drop in Exelon's long position.| CenterPoint Energy vs. DTE Energy | CenterPoint Energy vs. Alliant Energy Corp | CenterPoint Energy vs. Ameren Corp | CenterPoint Energy vs. Pinnacle West Capital |
| Exelon vs. Duke Energy | Exelon vs. Dominion Energy | Exelon vs. Southern Company | Exelon vs. Consolidated Edison |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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