Correlation Between NRG Energy and ScanTech
Can any of the company-specific risk be diversified away by investing in both NRG Energy and ScanTech 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 NRG Energy and ScanTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRG Energy and ScanTech AI Systems, you can compare the effects of market volatilities on NRG Energy and ScanTech 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 NRG Energy with a short position of ScanTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRG Energy and ScanTech.
Diversification Opportunities for NRG Energy and ScanTech
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NRG and ScanTech is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding NRG Energy and ScanTech AI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanTech AI Systems and NRG 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 NRG Energy are associated (or correlated) with ScanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanTech AI Systems has no effect on the direction of NRG Energy i.e., NRG Energy and ScanTech go up and down completely randomly.
Pair Corralation between NRG Energy and ScanTech
Considering the 90-day investment horizon NRG Energy is expected to generate 0.73 times more return on investment than ScanTech. However, NRG Energy is 1.37 times less risky than ScanTech. It trades about 0.18 of its potential returns per unit of risk. ScanTech AI Systems is currently generating about -0.24 per unit of risk. If you would invest 10,914 in NRG Energy on April 30, 2025 and sell it today you would earn a total of 4,940 from holding NRG Energy or generate 45.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRG Energy vs. ScanTech AI Systems
Performance |
| Timeline |
| NRG Energy |
| ScanTech AI Systems |
NRG Energy and ScanTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRG Energy and ScanTech
The main advantage of trading using opposite NRG Energy and ScanTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRG Energy position performs unexpectedly, ScanTech 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 ScanTech will offset losses from the drop in ScanTech's long position.| NRG Energy vs. TransAlta Corp | NRG Energy vs. Kenon Holdings | NRG Energy vs. Pampa Energia SA | NRG Energy vs. AGL Energy |
| ScanTech vs. Gevo Inc | ScanTech vs. The Mosaic | ScanTech vs. Sensient Technologies | ScanTech vs. Lifevantage |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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