Correlation Between Middlesex Water and Entergy Arkansas
Can any of the company-specific risk be diversified away by investing in both Middlesex Water and Entergy Arkansas 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 Middlesex Water and Entergy Arkansas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Middlesex Water and Entergy Arkansas LLC, you can compare the effects of market volatilities on Middlesex Water and Entergy Arkansas 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 Middlesex Water with a short position of Entergy Arkansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Middlesex Water and Entergy Arkansas.
Diversification Opportunities for Middlesex Water and Entergy Arkansas
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Middlesex and Entergy is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Middlesex Water and Entergy Arkansas LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy Arkansas LLC and Middlesex Water 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 Middlesex Water are associated (or correlated) with Entergy Arkansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy Arkansas LLC has no effect on the direction of Middlesex Water i.e., Middlesex Water and Entergy Arkansas go up and down completely randomly.
Pair Corralation between Middlesex Water and Entergy Arkansas
Given the investment horizon of 90 days Middlesex Water is expected to generate 4.88 times more return on investment than Entergy Arkansas. However, Middlesex Water is 4.88 times more volatile than Entergy Arkansas LLC. It trades about 0.0 of its potential returns per unit of risk. Entergy Arkansas LLC is currently generating about -0.06 per unit of risk. If you would invest 5,274 in Middlesex Water on September 8, 2025 and sell it today you would lose (83.00) from holding Middlesex Water or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Middlesex Water vs. Entergy Arkansas LLC
Performance |
| Timeline |
| Middlesex Water |
| Entergy Arkansas LLC |
Middlesex Water and Entergy Arkansas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Middlesex Water and Entergy Arkansas
The main advantage of trading using opposite Middlesex Water and Entergy Arkansas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middlesex Water position performs unexpectedly, Entergy Arkansas 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 Entergy Arkansas will offset losses from the drop in Entergy Arkansas' long position.| Middlesex Water vs. Guangdong Investment Limited | Middlesex Water vs. HEALTHeUNIVERSE | Middlesex Water vs. PureTech Health plc | Middlesex Water vs. Vice Health and |
| Entergy Arkansas vs. InPlay Oil Corp | Entergy Arkansas vs. Champion Gaming Group | Entergy Arkansas vs. Backstageplay | Entergy Arkansas vs. Xtreme Motorsports International |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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