Correlation Between NORTHEAST UTILITIES and Apple
Can any of the company-specific risk be diversified away by investing in both NORTHEAST UTILITIES and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORTHEAST UTILITIES and Apple Inc, you can compare the effects of market volatilities on NORTHEAST UTILITIES and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHEAST UTILITIES and Apple.
Diversification Opportunities for NORTHEAST UTILITIES and Apple
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NORTHEAST and Apple is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NORTHEAST UTILITIES and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of NORTHEAST UTILITIES i.e., NORTHEAST UTILITIES and Apple go up and down completely randomly.
Pair Corralation between NORTHEAST UTILITIES and Apple
Assuming the 90 days trading horizon NORTHEAST UTILITIES is expected to under-perform the Apple. In addition to that, NORTHEAST UTILITIES is 1.41 times more volatile than Apple Inc. It trades about -0.02 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.49 per unit of volatility. If you would invest 21,425 in Apple Inc on September 14, 2024 and sell it today you would earn a total of 2,255 from holding Apple Inc or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORTHEAST UTILITIES vs. Apple Inc
Performance |
| Timeline |
| NORTHEAST UTILITIES |
| Apple Inc |
NORTHEAST UTILITIES and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHEAST UTILITIES and Apple
The main advantage of trading using opposite NORTHEAST UTILITIES and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHEAST UTILITIES position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| NORTHEAST UTILITIES vs. Micron Technology | NORTHEAST UTILITIES vs. MSAD INSURANCE | NORTHEAST UTILITIES vs. Universal Insurance Holdings | NORTHEAST UTILITIES vs. Amkor Technology |
| Apple vs. LION ONE METALS | Apple vs. MCEWEN MINING INC | Apple vs. Universal Entertainment | Apple vs. TOWNSQUARE MEDIA INC |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |