Correlation Between NEP Old and Excelerate Energy

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

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

Diversification Opportunities for NEP Old and Excelerate Energy

-0.5

Correlation Coefficient

NEP Old  Excelerate Energy

Very good diversification

The 3 months correlation between NEP and Excelerate is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding NEP Old and Excelerate Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelerate Energy and NEP Old 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 NEP Old are associated (or correlated) with Excelerate Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelerate Energy has no effect on the direction of NEP Old i.e., NEP Old and Excelerate Energy go up and down completely randomly.

Pair Corralation between NEP Old and Excelerate Energy

Considering the 90-day investment horizon NEP Old is expected to under-perform the Excelerate Energy. In addition to that, NEP Old is 2.4 times more volatile than Excelerate Energy. It trades about -0.33 of its total potential returns per unit of risk. Excelerate Energy is currently generating about -0.03 per unit of volatility. If you would invest  3,007  in Excelerate Energy on December 29, 2024 and sell it today you would lose (208.00) from holding Excelerate Energy or give up 6.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	37.7%
Values	Daily Returns

NEP Old  vs.  Excelerate Energy

NEP Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEP Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Excelerate Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Excelerate Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Excelerate Energy is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NEP Old and Excelerate Energy

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

The idea behind NEP Old and Excelerate Energy 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.