Correlation Between Corning Incorporated and CONSTELLATION

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

By analyzing existing cross correlation between Corning Incorporated and CONSTELLATION ENERGY GROUP, you can compare the effects of market volatilities on Corning Incorporated and CONSTELLATION 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 Corning Incorporated with a short position of CONSTELLATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corning Incorporated and CONSTELLATION.

Diversification Opportunities for Corning Incorporated and CONSTELLATION

-0.49

Correlation Coefficient

Corning Incorporated  CONSTELLATION

Very good diversification

The 3 months correlation between Corning and CONSTELLATION is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and CONSTELLATION ENERGY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSTELLATION ENERGY and Corning Incorporated 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 Corning Incorporated are associated (or correlated) with CONSTELLATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSTELLATION ENERGY has no effect on the direction of Corning Incorporated i.e., Corning Incorporated and CONSTELLATION go up and down completely randomly.

Pair Corralation between Corning Incorporated and CONSTELLATION

Considering the 90-day investment horizon Corning Incorporated is expected to generate 1.43 times more return on investment than CONSTELLATION. However, Corning Incorporated is 1.43 times more volatile than CONSTELLATION ENERGY GROUP. It trades about 0.18 of its potential returns per unit of risk. CONSTELLATION ENERGY GROUP is currently generating about -0.11 per unit of risk. If you would invest  4,597  in Corning Incorporated on October 25, 2024 and sell it today you would earn a total of  799.50  from holding Corning Incorporated or generate 17.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	61.67%
Values	Daily Returns

Corning Incorporated  vs.  CONSTELLATION ENERGY GROUP

Corning Incorporated

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Corning Incorporated are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Corning Incorporated showed solid returns over the last few months and may actually be approaching a breakup point.

CONSTELLATION ENERGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONSTELLATION ENERGY GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CONSTELLATION ENERGY GROUP investors.

Pair Trading with Corning Incorporated and CONSTELLATION

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

The idea behind Corning Incorporated and CONSTELLATION ENERGY GROUP 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.