Correlation Between MPC Energy and Integrated Wind

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

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

Diversification Opportunities for MPC Energy and Integrated Wind

0.75

Correlation Coefficient

MPC Energy  Integrated Wind

Poor diversification

The 3 months correlation between MPC and Integrated is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding MPC Energy Solutions and Integrated Wind Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Wind Solutions and MPC 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 MPC Energy Solutions are associated (or correlated) with Integrated Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Wind Solutions has no effect on the direction of MPC Energy i.e., MPC Energy and Integrated Wind go up and down completely randomly.

Pair Corralation between MPC Energy and Integrated Wind

Assuming the 90 days trading horizon MPC Energy Solutions is expected to generate 0.96 times more return on investment than Integrated Wind. However, MPC Energy Solutions is 1.04 times less risky than Integrated Wind. It trades about 0.16 of its potential returns per unit of risk. Integrated Wind Solutions is currently generating about 0.11 per unit of risk. If you would invest  898.00  in MPC Energy Solutions on April 24, 2025 and sell it today you would earn a total of  157.00  from holding MPC Energy Solutions or generate 17.48% return on investment over 90 days.

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

MPC Energy Solutions  vs.  Integrated Wind Solutions

MPC Energy Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MPC Energy Solutions are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, MPC Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Integrated Wind Solutions

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Wind Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Integrated Wind may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with MPC Energy and Integrated Wind

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

The idea behind MPC Energy Solutions and Integrated Wind Solutions 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.