Correlation Between NORTHEAST UTILITIES and FUTURE GAMING
Can any of the company-specific risk be diversified away by investing in both NORTHEAST UTILITIES and FUTURE GAMING 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 NORTHEAST UTILITIES and FUTURE GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORTHEAST UTILITIES and FUTURE GAMING GRP, you can compare the effects of market volatilities on NORTHEAST UTILITIES and FUTURE GAMING 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 NORTHEAST UTILITIES with a short position of FUTURE GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHEAST UTILITIES and FUTURE GAMING.
Diversification Opportunities for NORTHEAST UTILITIES and FUTURE GAMING
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NORTHEAST and FUTURE is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NORTHEAST UTILITIES and FUTURE GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUTURE GAMING GRP and NORTHEAST UTILITIES 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 NORTHEAST UTILITIES are associated (or correlated) with FUTURE GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUTURE GAMING GRP has no effect on the direction of NORTHEAST UTILITIES i.e., NORTHEAST UTILITIES and FUTURE GAMING go up and down completely randomly.
Pair Corralation between NORTHEAST UTILITIES and FUTURE GAMING
Assuming the 90 days trading horizon NORTHEAST UTILITIES is expected to generate 8.59 times less return on investment than FUTURE GAMING. But when comparing it to its historical volatility, NORTHEAST UTILITIES is 4.1 times less risky than FUTURE GAMING. It trades about 0.02 of its potential returns per unit of risk. FUTURE GAMING GRP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 44.00 in FUTURE GAMING GRP on September 12, 2024 and sell it today you would earn a total of 5.00 from holding FUTURE GAMING GRP or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORTHEAST UTILITIES vs. FUTURE GAMING GRP
Performance |
| Timeline |
| NORTHEAST UTILITIES |
| FUTURE GAMING GRP |
NORTHEAST UTILITIES and FUTURE GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHEAST UTILITIES and FUTURE GAMING
The main advantage of trading using opposite NORTHEAST UTILITIES and FUTURE GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHEAST UTILITIES position performs unexpectedly, FUTURE GAMING 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 FUTURE GAMING will offset losses from the drop in FUTURE GAMING's long position.| NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc |
| FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology | FUTURE GAMING vs. Superior Plus Corp | FUTURE GAMING vs. SIVERS SEMICONDUCTORS AB |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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