Correlation Between Massachusetts Electric and Connecticut Light
Can any of the company-specific risk be diversified away by investing in both Massachusetts Electric and Connecticut Light 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 Massachusetts Electric and Connecticut Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massachusetts Electric and The Connecticut Light, you can compare the effects of market volatilities on Massachusetts Electric and Connecticut Light 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 Massachusetts Electric with a short position of Connecticut Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massachusetts Electric and Connecticut Light.
Diversification Opportunities for Massachusetts Electric and Connecticut Light
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Massachusetts and Connecticut is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Massachusetts Electric and The Connecticut Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connecticut Light and Massachusetts Electric 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 Massachusetts Electric are associated (or correlated) with Connecticut Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connecticut Light has no effect on the direction of Massachusetts Electric i.e., Massachusetts Electric and Connecticut Light go up and down completely randomly.
Pair Corralation between Massachusetts Electric and Connecticut Light
If you would invest (100.00) in Massachusetts Electric on October 11, 2024 and sell it today you would earn a total of 100.00 from holding Massachusetts Electric or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Massachusetts Electric vs. The Connecticut Light
Performance |
| Timeline |
| Massachusetts Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Connecticut Light |
Massachusetts Electric and Connecticut Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massachusetts Electric and Connecticut Light
The main advantage of trading using opposite Massachusetts Electric and Connecticut Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massachusetts Electric position performs unexpectedly, Connecticut Light 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 Connecticut Light will offset losses from the drop in Connecticut Light's long position.| Massachusetts Electric vs. Omni Health | Massachusetts Electric vs. Regeneron Pharmaceuticals | Massachusetts Electric vs. Valneva SE ADR | Massachusetts Electric vs. Univest Pennsylvania |
| 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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