Correlation Between Public Power and GEK TERNA

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

By analyzing existing cross correlation between Public Power and GEK TERNA Holdings, you can compare the effects of market volatilities on Public Power and GEK TERNA 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 Public Power with a short position of GEK TERNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Power and GEK TERNA.

Diversification Opportunities for Public Power and GEK TERNA

0.84

Correlation Coefficient

Public Power  GEK TERNA

Very poor diversification

The 3 months correlation between Public and GEK is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Public Power and GEK TERNA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEK TERNA Holdings and Public Power 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 Public Power are associated (or correlated) with GEK TERNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEK TERNA Holdings has no effect on the direction of Public Power i.e., Public Power and GEK TERNA go up and down completely randomly.

Pair Corralation between Public Power and GEK TERNA

Assuming the 90 days trading horizon Public Power is expected to generate 1.67 times less return on investment than GEK TERNA. In addition to that, Public Power is 1.16 times more volatile than GEK TERNA Holdings. It trades about 0.1 of its total potential returns per unit of risk. GEK TERNA Holdings is currently generating about 0.2 per unit of volatility. If you would invest  1,849  in GEK TERNA Holdings on April 24, 2025 and sell it today you would earn a total of  261.00  from holding GEK TERNA Holdings or generate 14.12% return on investment over 90 days.

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

Public Power  vs.  GEK TERNA Holdings

Public Power

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Public Power are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Public Power may actually be approaching a critical reversion point that can send shares even higher in August 2025.

GEK TERNA Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GEK TERNA Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, GEK TERNA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Public Power and GEK TERNA

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

The idea behind Public Power and GEK TERNA Holdings 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.