Correlation Between ANT and Narragansett Electric
Can any of the company-specific risk be diversified away by investing in both ANT and Narragansett Electric 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 ANT and Narragansett Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and The Narragansett Electric, you can compare the effects of market volatilities on ANT and Narragansett Electric 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 ANT with a short position of Narragansett Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Narragansett Electric.
Diversification Opportunities for ANT and Narragansett Electric
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANT and Narragansett is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ANT and The Narragansett Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Narragansett Electric and ANT 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 ANT are associated (or correlated) with Narragansett Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Narragansett Electric has no effect on the direction of ANT i.e., ANT and Narragansett Electric go up and down completely randomly.
Pair Corralation between ANT and Narragansett Electric
If you would invest 125.00 in ANT on October 12, 2024 and sell it today you would earn a total of 22.00 from holding ANT or generate 17.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
ANT vs. The Narragansett Electric
Performance |
| Timeline |
| ANT |
| The Narragansett Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ANT and Narragansett Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and Narragansett Electric
The main advantage of trading using opposite ANT and Narragansett Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, Narragansett Electric 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 Narragansett Electric will offset losses from the drop in Narragansett Electric's long position.The idea behind ANT and The Narragansett Electric 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.| Narragansett Electric vs. Foot Locker | Narragansett Electric vs. Funko Inc | Narragansett Electric vs. G III Apparel Group | Narragansett Electric vs. Grounded People Apparel |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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