Correlation Between Excelerate Energy and FirstEnergy

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

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

Diversification Opportunities for Excelerate Energy and FirstEnergy

-0.61

Correlation Coefficient

Excelerate Energy  FirstEnergy

Excellent diversification

The 3 months correlation between Excelerate and FirstEnergy is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Excelerate Energy and FirstEnergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstEnergy and Excelerate 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 Excelerate Energy are associated (or correlated) with FirstEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstEnergy has no effect on the direction of Excelerate Energy i.e., Excelerate Energy and FirstEnergy go up and down completely randomly.

Pair Corralation between Excelerate Energy and FirstEnergy

Allowing for the 90-day total investment horizon Excelerate Energy is expected to generate 1.99 times more return on investment than FirstEnergy. However, Excelerate Energy is 1.99 times more volatile than FirstEnergy. It trades about 0.24 of its potential returns per unit of risk. FirstEnergy is currently generating about 0.3 per unit of risk. If you would invest  2,374  in Excelerate Energy on July 6, 2025 and sell it today you would earn a total of  214.00  from holding Excelerate Energy or generate 9.01% return on investment over 90 days.

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

Excelerate Energy  vs.  FirstEnergy

Excelerate Energy

Risk-Adjusted Performance

Weakest

Over the last 90 days Excelerate Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

FirstEnergy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FirstEnergy are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, FirstEnergy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Excelerate Energy and FirstEnergy

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

The idea behind Excelerate Energy and FirstEnergy 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.