Correlation Between LABOCANNA and Consolidated Edison

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

By analyzing existing cross correlation between LABOCANNA SA ZY 10 and Consolidated Edison, you can compare the effects of market volatilities on LABOCANNA and Consolidated Edison 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 LABOCANNA with a short position of Consolidated Edison. Check out your portfolio center. Please also check ongoing floating volatility patterns of LABOCANNA and Consolidated Edison.

Diversification Opportunities for LABOCANNA and Consolidated Edison

0.86

Correlation Coefficient

LABOCANNA  Consolidated Edison

Very poor diversification

The 3 months correlation between LABOCANNA and Consolidated is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding LABOCANNA SA ZY 10 and Consolidated Edison in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Edison and LABOCANNA 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 LABOCANNA SA ZY 10 are associated (or correlated) with Consolidated Edison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Edison has no effect on the direction of LABOCANNA i.e., LABOCANNA and Consolidated Edison go up and down completely randomly.

Pair Corralation between LABOCANNA and Consolidated Edison

Assuming the 90 days horizon LABOCANNA SA ZY 10 is expected to under-perform the Consolidated Edison. But the stock apears to be less risky and, when comparing its historical volatility, LABOCANNA SA ZY 10 is 1.08 times less risky than Consolidated Edison. The stock trades about -0.14 of its potential returns per unit of risk. The Consolidated Edison is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  9,587  in Consolidated Edison on April 22, 2025 and sell it today you would lose (947.00) from holding Consolidated Edison or give up 9.88% of portfolio value over 90 days.

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

LABOCANNA SA ZY 10  vs.  Consolidated Edison

LABOCANNA SA ZY

Risk-Adjusted Performance

Very Weak

Over the last 90 days LABOCANNA SA ZY 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Consolidated Edison

Risk-Adjusted Performance

Very Weak

Over the last 90 days Consolidated Edison has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with LABOCANNA and Consolidated Edison

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

The idea behind LABOCANNA SA ZY 10 and Consolidated Edison 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.