Correlation Between CNVISION MEDIA and NORTHEAST UTILITIES
Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA 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 CNVISION MEDIA and NORTHEAST UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNVISION MEDIA and NORTHEAST UTILITIES, you can compare the effects of market volatilities on CNVISION MEDIA 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 CNVISION MEDIA with a short position of NORTHEAST UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and NORTHEAST UTILITIES.
Diversification Opportunities for CNVISION MEDIA and NORTHEAST UTILITIES
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CNVISION and NORTHEAST is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and NORTHEAST UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHEAST UTILITIES and CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA i.e., CNVISION MEDIA and NORTHEAST UTILITIES go up and down completely randomly.
Pair Corralation between CNVISION MEDIA and NORTHEAST UTILITIES
Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 2.09 times more return on investment than NORTHEAST UTILITIES. However, CNVISION MEDIA is 2.09 times more volatile than NORTHEAST UTILITIES. It trades about 0.01 of its potential returns per unit of risk. NORTHEAST UTILITIES is currently generating about 0.0 per unit of risk. If you would invest 5.10 in CNVISION MEDIA on August 31, 2024 and sell it today you would lose (0.35) from holding CNVISION MEDIA or give up 6.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNVISION MEDIA vs. NORTHEAST UTILITIES
Performance |
| Timeline |
| CNVISION MEDIA |
| NORTHEAST UTILITIES |
CNVISION MEDIA and NORTHEAST UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNVISION MEDIA and NORTHEAST UTILITIES
The main advantage of trading using opposite CNVISION MEDIA and NORTHEAST UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA 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.| CNVISION MEDIA vs. Chesapeake Utilities | CNVISION MEDIA vs. Waste Management | CNVISION MEDIA vs. AGF Management Limited | CNVISION MEDIA vs. Coor Service Management |
| NORTHEAST UTILITIES vs. STRAYER EDUCATION | NORTHEAST UTILITIES vs. REINET INVESTMENTS SCA | NORTHEAST UTILITIES vs. Virtus Investment Partners | NORTHEAST UTILITIES vs. Apollo Investment Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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