Correlation Between Guangdong Investment and NSTAR
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By analyzing existing cross correlation between Guangdong Investment Limited and NSTAR Electric Co, you can compare the effects of market volatilities on Guangdong Investment 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 Guangdong Investment with a short position of NSTAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and NSTAR.
Diversification Opportunities for Guangdong Investment and NSTAR
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and NSTAR is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and NSTAR Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR Electric and Guangdong Investment 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 Guangdong Investment Limited 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 Electric has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and NSTAR go up and down completely randomly.
Pair Corralation between Guangdong Investment and NSTAR
Assuming the 90 days horizon Guangdong Investment Limited is expected to generate 1.53 times more return on investment than NSTAR. However, Guangdong Investment is 1.53 times more volatile than NSTAR Electric Co. It trades about -0.12 of its potential returns per unit of risk. NSTAR Electric Co is currently generating about -0.22 per unit of risk. If you would invest 64.00 in Guangdong Investment Limited on September 4, 2024 and sell it today you would lose (3.00) from holding Guangdong Investment Limited or give up 4.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.0% |
| Values | Daily Returns |
Guangdong Investment Limited vs. NSTAR Electric Co
Performance |
| Timeline |
| Guangdong Investment |
| NSTAR Electric |
Guangdong Investment and NSTAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and NSTAR
The main advantage of trading using opposite Guangdong Investment and NSTAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment 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.| Guangdong Investment vs. Essential Utilities | Guangdong Investment vs. Guangdong Investment | Guangdong Investment vs. Anhui Conch Cement | Guangdong Investment vs. Beijing Enterprises Water |
| NSTAR vs. RBC Bearings Incorporated | NSTAR vs. Globalfoundries | NSTAR vs. Mannatech Incorporated | NSTAR vs. Spectrum Brands Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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