Correlation Between FirstEnergy and Fortis
Can any of the company-specific risk be diversified away by investing in both FirstEnergy and Fortis 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 FirstEnergy and Fortis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstEnergy and Fortis Inc, you can compare the effects of market volatilities on FirstEnergy and Fortis 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 FirstEnergy with a short position of Fortis. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstEnergy and Fortis.
Diversification Opportunities for FirstEnergy and Fortis
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FirstEnergy and Fortis is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding FirstEnergy and Fortis Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Inc and FirstEnergy 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 FirstEnergy are associated (or correlated) with Fortis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Inc has no effect on the direction of FirstEnergy i.e., FirstEnergy and Fortis go up and down completely randomly.
Pair Corralation between FirstEnergy and Fortis
Allowing for the 90-day total investment horizon FirstEnergy is expected to generate 1.11 times more return on investment than Fortis. However, FirstEnergy is 1.11 times more volatile than Fortis Inc. It trades about 0.17 of its potential returns per unit of risk. Fortis Inc is currently generating about 0.11 per unit of risk. If you would invest 4,300 in FirstEnergy on August 19, 2025 and sell it today you would earn a total of 356.00 from holding FirstEnergy or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FirstEnergy vs. Fortis Inc
Performance |
| Timeline |
| FirstEnergy |
| Fortis Inc |
FirstEnergy and Fortis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstEnergy and Fortis
The main advantage of trading using opposite FirstEnergy and Fortis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstEnergy position performs unexpectedly, Fortis 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 Fortis will offset losses from the drop in Fortis' long position.| FirstEnergy vs. CMS Energy | FirstEnergy vs. IDACORP | FirstEnergy vs. Essential Utilities | FirstEnergy vs. The AES |
| Fortis vs. Centrais Eltricas Brasileiras | Fortis vs. Southern Company | Fortis vs. Centrais Electricas Brasileiras | Fortis vs. FirstEnergy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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