Correlation Between NORTHEAST UTILITIES and TSOGO SUN
Can any of the company-specific risk be diversified away by investing in both NORTHEAST UTILITIES and TSOGO SUN 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 TSOGO SUN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORTHEAST UTILITIES and TSOGO SUN GAMING, you can compare the effects of market volatilities on NORTHEAST UTILITIES and TSOGO SUN 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 TSOGO SUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHEAST UTILITIES and TSOGO SUN.
Diversification Opportunities for NORTHEAST UTILITIES and TSOGO SUN
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORTHEAST and TSOGO is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NORTHEAST UTILITIES and TSOGO SUN GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSOGO SUN GAMING 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 TSOGO SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSOGO SUN GAMING has no effect on the direction of NORTHEAST UTILITIES i.e., NORTHEAST UTILITIES and TSOGO SUN go up and down completely randomly.
Pair Corralation between NORTHEAST UTILITIES and TSOGO SUN
Assuming the 90 days trading horizon NORTHEAST UTILITIES is expected to under-perform the TSOGO SUN. But the stock apears to be less risky and, when comparing its historical volatility, NORTHEAST UTILITIES is 3.06 times less risky than TSOGO SUN. The stock trades about -0.02 of its potential returns per unit of risk. The TSOGO SUN GAMING is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 32.00 in TSOGO SUN GAMING on September 3, 2024 and sell it today you would earn a total of 22.00 from holding TSOGO SUN GAMING or generate 68.75% 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. TSOGO SUN GAMING
Performance |
| Timeline |
| NORTHEAST UTILITIES |
| TSOGO SUN GAMING |
NORTHEAST UTILITIES and TSOGO SUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHEAST UTILITIES and TSOGO SUN
The main advantage of trading using opposite NORTHEAST UTILITIES and TSOGO SUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHEAST UTILITIES position performs unexpectedly, TSOGO SUN 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 TSOGO SUN will offset losses from the drop in TSOGO SUN's long position.| NORTHEAST UTILITIES vs. TOTAL GABON | NORTHEAST UTILITIES vs. Walgreens Boots Alliance | NORTHEAST UTILITIES vs. Peak Resources Limited |
| TSOGO SUN vs. Las Vegas Sands | TSOGO SUN vs. ENTAIN PLC UNSPADR1 | TSOGO SUN vs. GENTING SG LTD | TSOGO SUN vs. Boyd Gaming |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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