Correlation Between FirstEnergy and UNITIL
Can any of the company-specific risk be diversified away by investing in both FirstEnergy and UNITIL 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 UNITIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstEnergy and UNITIL, you can compare the effects of market volatilities on FirstEnergy and UNITIL 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 UNITIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstEnergy and UNITIL.
Diversification Opportunities for FirstEnergy and UNITIL
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FirstEnergy and UNITIL is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding FirstEnergy and UNITIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITIL 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 UNITIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITIL has no effect on the direction of FirstEnergy i.e., FirstEnergy and UNITIL go up and down completely randomly.
Pair Corralation between FirstEnergy and UNITIL
Allowing for the 90-day total investment horizon FirstEnergy is expected to generate 0.58 times more return on investment than UNITIL. However, FirstEnergy is 1.72 times less risky than UNITIL. It trades about 0.13 of its potential returns per unit of risk. UNITIL is currently generating about -0.13 per unit of risk. If you would invest 4,077 in FirstEnergy on May 28, 2025 and sell it today you would earn a total of 282.00 from holding FirstEnergy or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FirstEnergy vs. UNITIL
Performance |
| Timeline |
| FirstEnergy |
| UNITIL |
FirstEnergy and UNITIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstEnergy and UNITIL
The main advantage of trading using opposite FirstEnergy and UNITIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstEnergy position performs unexpectedly, UNITIL 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 UNITIL will offset losses from the drop in UNITIL's long position.| FirstEnergy vs. CenterPoint Energy | FirstEnergy vs. Pinnacle West Capital | FirstEnergy vs. Edison International | FirstEnergy vs. Public Service Enterprise |
| UNITIL vs. The AES | UNITIL vs. Allete Inc | UNITIL vs. Brookfield Infrastructure Partners | UNITIL vs. Brookfield Infrastructure Partners |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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