Correlation Between Block and NRG Energy,

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

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

Diversification Opportunities for Block and NRG Energy,

0.0

Correlation Coefficient

Block  NRG Energy,

Pay attention - limited upside

The 3 months correlation between Block and NRG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Block Inc and NRG Energy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRG Energy, and Block 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 Block Inc are associated (or correlated) with NRG Energy,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRG Energy, has no effect on the direction of Block i.e., Block and NRG Energy, go up and down completely randomly.

Pair Corralation between Block and NRG Energy,

If you would invest  49,441  in NRG Energy, on October 21, 2024 and sell it today you would earn a total of  14,879  from holding NRG Energy, or generate 30.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Block Inc  vs.  NRG Energy,

Block Inc

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Block Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Block is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NRG Energy,

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NRG Energy, are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NRG Energy, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Block and NRG Energy,

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

The idea behind Block Inc and NRG 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.