Correlation Between LANDSEA GREEN and NORTHEAST UTILITIES
Can any of the company-specific risk be diversified away by investing in both LANDSEA GREEN and NORTHEAST UTILITIES 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 LANDSEA GREEN and NORTHEAST UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LANDSEA GREEN MANAGEMENT and NORTHEAST UTILITIES, you can compare the effects of market volatilities on LANDSEA GREEN and NORTHEAST UTILITIES 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 LANDSEA GREEN with a short position of NORTHEAST UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of LANDSEA GREEN and NORTHEAST UTILITIES.
Diversification Opportunities for LANDSEA GREEN and NORTHEAST UTILITIES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LANDSEA and NORTHEAST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LANDSEA GREEN MANAGEMENT and NORTHEAST UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHEAST UTILITIES and LANDSEA GREEN 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 LANDSEA GREEN MANAGEMENT are associated (or correlated) with NORTHEAST UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHEAST UTILITIES has no effect on the direction of LANDSEA GREEN i.e., LANDSEA GREEN and NORTHEAST UTILITIES go up and down completely randomly.
Pair Corralation between LANDSEA GREEN and NORTHEAST UTILITIES
Assuming the 90 days horizon LANDSEA GREEN MANAGEMENT is expected to generate 50.69 times more return on investment than NORTHEAST UTILITIES. However, LANDSEA GREEN is 50.69 times more volatile than NORTHEAST UTILITIES. It trades about 0.07 of its potential returns per unit of risk. NORTHEAST UTILITIES is currently generating about -0.03 per unit of risk. If you would invest 1.55 in LANDSEA GREEN MANAGEMENT on October 25, 2024 and sell it today you would lose (1.45) from holding LANDSEA GREEN MANAGEMENT or give up 93.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LANDSEA GREEN MANAGEMENT vs. NORTHEAST UTILITIES
Performance |
| Timeline |
| LANDSEA GREEN MANAGEMENT |
| NORTHEAST UTILITIES |
LANDSEA GREEN and NORTHEAST UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LANDSEA GREEN and NORTHEAST UTILITIES
The main advantage of trading using opposite LANDSEA GREEN and NORTHEAST UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANDSEA GREEN position performs unexpectedly, NORTHEAST UTILITIES 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 NORTHEAST UTILITIES will offset losses from the drop in NORTHEAST UTILITIES's long position.| LANDSEA GREEN vs. CITIC Telecom International | LANDSEA GREEN vs. Performance Food Group | LANDSEA GREEN vs. Telecom Argentina SA | LANDSEA GREEN vs. Nomad Foods |
| NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc |
Check out your portfolio center.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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