Correlation Between Disney and NSTAR
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By analyzing existing cross correlation between Walt Disney and NSTAR ELEC 32, you can compare the effects of market volatilities on Disney and NSTAR 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 Disney with a short position of NSTAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and NSTAR.
Diversification Opportunities for Disney and NSTAR
Very good diversification
The 3 months correlation between Disney and NSTAR is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and NSTAR ELEC 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR ELEC 32 and Disney 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 Walt Disney are associated (or correlated) with NSTAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR ELEC 32 has no effect on the direction of Disney i.e., Disney and NSTAR go up and down completely randomly.
Pair Corralation between Disney and NSTAR
Considering the 90-day investment horizon Walt Disney is expected to generate 6.77 times more return on investment than NSTAR. However, Disney is 6.77 times more volatile than NSTAR ELEC 32. It trades about 0.08 of its potential returns per unit of risk. NSTAR ELEC 32 is currently generating about 0.08 per unit of risk. If you would invest 10,230 in Walt Disney on September 1, 2024 and sell it today you would earn a total of 1,517 from holding Walt Disney or generate 14.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
Walt Disney vs. NSTAR ELEC 32
Performance |
| Timeline |
| Walt Disney |
| NSTAR ELEC 32 |
Disney and NSTAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and NSTAR
The main advantage of trading using opposite Disney and NSTAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, NSTAR 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 NSTAR will offset losses from the drop in NSTAR's long position.| Disney vs. ADTRAN Inc | Disney vs. Belden Inc | Disney vs. ADC Therapeutics SA | Disney vs. Comtech Telecommunications 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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