Correlation Between Connecticut Light and NH Foods
Can any of the company-specific risk be diversified away by investing in both Connecticut Light and NH Foods 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 Connecticut Light and NH Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Connecticut Light and NH Foods Ltd, you can compare the effects of market volatilities on Connecticut Light and NH Foods 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 Connecticut Light with a short position of NH Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connecticut Light and NH Foods.
Diversification Opportunities for Connecticut Light and NH Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Connecticut and NIPMY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Connecticut Light and NH Foods Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Foods and Connecticut Light 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 The Connecticut Light are associated (or correlated) with NH Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Foods has no effect on the direction of Connecticut Light i.e., Connecticut Light and NH Foods go up and down completely randomly.
Pair Corralation between Connecticut Light and NH Foods
Assuming the 90 days horizon The Connecticut Light is expected to under-perform the NH Foods. In addition to that, Connecticut Light is 4.23 times more volatile than NH Foods Ltd. It trades about -0.01 of its total potential returns per unit of risk. NH Foods Ltd is currently generating about 0.09 per unit of volatility. If you would invest 1,330 in NH Foods Ltd on October 12, 2024 and sell it today you would earn a total of 370.00 from holding NH Foods Ltd or generate 27.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 76.77% |
| Values | Daily Returns |
The Connecticut Light vs. NH Foods Ltd
Performance |
| Timeline |
| Connecticut Light |
| NH Foods |
Connecticut Light and NH Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connecticut Light and NH Foods
The main advantage of trading using opposite Connecticut Light and NH Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connecticut Light position performs unexpectedly, NH Foods 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 NH Foods will offset losses from the drop in NH Foods' long position.| Connecticut Light vs. NH Foods Ltd | Connecticut Light vs. ServiceNow | Connecticut Light vs. Cadence Design Systems | Connecticut Light vs. Rackspace Technology |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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