Correlation Between Old Republic and NET Power

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

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

Diversification Opportunities for Old Republic and NET Power

-0.25

Correlation Coefficient

Old Republic  NET Power

Very good diversification

The 3 months correlation between Old and NET is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and NET Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NET Power and Old Republic 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 Old Republic International are associated (or correlated) with NET Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NET Power has no effect on the direction of Old Republic i.e., Old Republic and NET Power go up and down completely randomly.

Pair Corralation between Old Republic and NET Power

Considering the 90-day investment horizon Old Republic is expected to generate 10.18 times less return on investment than NET Power. But when comparing it to its historical volatility, Old Republic International is 7.8 times less risky than NET Power. It trades about 0.09 of its potential returns per unit of risk. NET Power is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  162.00  in NET Power on May 26, 2025 and sell it today you would earn a total of  91.00  from holding NET Power or generate 56.17% return on investment over 90 days.

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

Old Republic International  vs.  NET Power

Old Republic Interna

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Old Republic International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Old Republic may actually be approaching a critical reversion point that can send shares even higher in September 2025.

NET Power

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in NET Power are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, NET Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Old Republic and NET Power

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

The idea behind Old Republic International and NET Power 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 Commodity Directory module to find actively traded commodities issued by global exchanges.