Correlation Between FUYO GENERAL and NORTHEAST UTILITIES
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL 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 FUYO GENERAL and NORTHEAST UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and NORTHEAST UTILITIES, you can compare the effects of market volatilities on FUYO GENERAL 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 FUYO GENERAL with a short position of NORTHEAST UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and NORTHEAST UTILITIES.
Diversification Opportunities for FUYO GENERAL and NORTHEAST UTILITIES
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FUYO and NORTHEAST is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and NORTHEAST UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHEAST UTILITIES and FUYO GENERAL 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 FUYO GENERAL LEASE 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 FUYO GENERAL i.e., FUYO GENERAL and NORTHEAST UTILITIES go up and down completely randomly.
Pair Corralation between FUYO GENERAL and NORTHEAST UTILITIES
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the NORTHEAST UTILITIES. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.02 times less risky than NORTHEAST UTILITIES. The stock trades about -0.03 of its potential returns per unit of risk. The NORTHEAST UTILITIES is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,500 in NORTHEAST UTILITIES on October 23, 2024 and sell it today you would earn a total of 50.00 from holding NORTHEAST UTILITIES or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. NORTHEAST UTILITIES
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| NORTHEAST UTILITIES |
FUYO GENERAL and NORTHEAST UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and NORTHEAST UTILITIES
The main advantage of trading using opposite FUYO GENERAL and NORTHEAST UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL 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.| FUYO GENERAL vs. Universal Display | FUYO GENERAL vs. Liberty Broadband | FUYO GENERAL vs. PLAYSTUDIOS A DL 0001 | FUYO GENERAL vs. COLUMBIA SPORTSWEAR |
| NORTHEAST UTILITIES vs. China Development Bank | NORTHEAST UTILITIES vs. Universal Entertainment | NORTHEAST UTILITIES vs. GigaMedia | NORTHEAST UTILITIES vs. FUYO GENERAL LEASE |
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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