Correlation Between Eversource Energy and Oklo

Can any of the company-specific risk be diversified away by investing in both Eversource Energy and Oklo 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 Eversource Energy and Oklo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eversource Energy and Oklo Inc, you can compare the effects of market volatilities on Eversource Energy and Oklo 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 Eversource Energy with a short position of Oklo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eversource Energy and Oklo.

Diversification Opportunities for Eversource Energy and Oklo

0.2

Correlation Coefficient

Eversource Energy  Oklo

Modest diversification

The 3 months correlation between Eversource and Oklo is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eversource Energy and Oklo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklo Inc and Eversource 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 Eversource Energy are associated (or correlated) with Oklo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklo Inc has no effect on the direction of Eversource Energy i.e., Eversource Energy and Oklo go up and down completely randomly.

Pair Corralation between Eversource Energy and Oklo

Allowing for the 90-day total investment horizon Eversource Energy is expected to generate 70.32 times less return on investment than Oklo. But when comparing it to its historical volatility, Eversource Energy is 5.75 times less risky than Oklo. It trades about 0.01 of its potential returns per unit of risk. Oklo Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,223  in Oklo Inc on December 2, 2024 and sell it today you would earn a total of  1,116  from holding Oklo Inc or generate 50.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Eversource Energy  vs.  Oklo Inc

Eversource Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eversource Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Eversource Energy is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Oklo Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oklo Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal essential indicators, Oklo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eversource Energy and Oklo

The main advantage of trading using opposite Eversource Energy and Oklo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eversource Energy position performs unexpectedly, Oklo 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 Oklo will offset losses from the drop in Oklo's long position.

The idea behind Eversource Energy and Oklo Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.