Correlation Between Consolidated Edison and Exelon
Can any of the company-specific risk be diversified away by investing in both Consolidated Edison 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 Consolidated Edison and Exelon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Edison and Exelon, you can compare the effects of market volatilities on Consolidated Edison 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 Consolidated Edison with a short position of Exelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Edison and Exelon.
Diversification Opportunities for Consolidated Edison and Exelon
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Consolidated and Exelon is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Edison and Exelon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelon and Consolidated Edison 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 Consolidated Edison 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 Consolidated Edison i.e., Consolidated Edison and Exelon go up and down completely randomly.
Pair Corralation between Consolidated Edison and Exelon
Allowing for the 90-day total investment horizon Consolidated Edison is expected to under-perform the Exelon. In addition to that, Consolidated Edison is 1.02 times more volatile than Exelon. It trades about -0.04 of its total potential returns per unit of risk. Exelon is currently generating about -0.01 per unit of volatility. If you would invest 4,319 in Exelon on March 24, 2025 and sell it today you would lose (59.00) from holding Exelon or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Edison vs. Exelon
Performance |
| Timeline |
| Consolidated Edison |
| Exelon |
Consolidated Edison and Exelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Edison and Exelon
The main advantage of trading using opposite Consolidated Edison and Exelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Edison 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.| Consolidated Edison vs. Duke Energy | Consolidated Edison vs. Dominion Energy | Consolidated Edison vs. American Electric Power | Consolidated Edison vs. Nextera Energy |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |