Correlation Between Niagara Mohawk and Narragansett Electric
Can any of the company-specific risk be diversified away by investing in both Niagara Mohawk and Narragansett Electric 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 Niagara Mohawk and Narragansett Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Niagara Mohawk Power and The Narragansett Electric, you can compare the effects of market volatilities on Niagara Mohawk and Narragansett Electric 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 Niagara Mohawk with a short position of Narragansett Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niagara Mohawk and Narragansett Electric.
Diversification Opportunities for Niagara Mohawk and Narragansett Electric
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Niagara and Narragansett is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Niagara Mohawk Power and The Narragansett Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Narragansett Electric and Niagara Mohawk 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 Niagara Mohawk Power are associated (or correlated) with Narragansett Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Narragansett Electric has no effect on the direction of Niagara Mohawk i.e., Niagara Mohawk and Narragansett Electric go up and down completely randomly.
Pair Corralation between Niagara Mohawk and Narragansett Electric
If you would invest 5,500 in The Narragansett Electric on October 12, 2024 and sell it today you would earn a total of 0.00 from holding The Narragansett Electric or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Niagara Mohawk Power vs. The Narragansett Electric
Performance |
| Timeline |
| Niagara Mohawk Power |
| The Narragansett Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Niagara Mohawk and Narragansett Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Niagara Mohawk and Narragansett Electric
The main advantage of trading using opposite Niagara Mohawk and Narragansett Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niagara Mohawk position performs unexpectedly, Narragansett Electric 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 Narragansett Electric will offset losses from the drop in Narragansett Electric's long position.| Niagara Mohawk vs. RLJ Lodging Trust | Niagara Mohawk vs. The Cheesecake Factory | Niagara Mohawk vs. Shake Shack | Niagara Mohawk vs. Bt Brands |
| Narragansett Electric vs. Foot Locker | Narragansett Electric vs. Funko Inc | Narragansett Electric vs. G III Apparel Group | Narragansett Electric vs. Grounded People Apparel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |