Correlation Between NORTHEAST UTILITIES and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both NORTHEAST UTILITIES and CSSC Offshore 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 CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORTHEAST UTILITIES and CSSC Offshore Marine, you can compare the effects of market volatilities on NORTHEAST UTILITIES and CSSC Offshore 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 CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHEAST UTILITIES and CSSC Offshore.
Diversification Opportunities for NORTHEAST UTILITIES and CSSC Offshore
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORTHEAST and CSSC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NORTHEAST UTILITIES and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of NORTHEAST UTILITIES i.e., NORTHEAST UTILITIES and CSSC Offshore go up and down completely randomly.
Pair Corralation between NORTHEAST UTILITIES and CSSC Offshore
Assuming the 90 days trading horizon NORTHEAST UTILITIES is expected to generate 0.45 times more return on investment than CSSC Offshore. However, NORTHEAST UTILITIES is 2.25 times less risky than CSSC Offshore. It trades about -0.02 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.19 per unit of risk. If you would invest 6,100 in NORTHEAST UTILITIES on September 1, 2024 and sell it today you would lose (50.00) from holding NORTHEAST UTILITIES or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORTHEAST UTILITIES vs. CSSC Offshore Marine
Performance |
| Timeline |
| NORTHEAST UTILITIES |
| CSSC Offshore Marine |
NORTHEAST UTILITIES and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHEAST UTILITIES and CSSC Offshore
The main advantage of trading using opposite NORTHEAST UTILITIES and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHEAST UTILITIES position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.| NORTHEAST UTILITIES vs. SIVERS SEMICONDUCTORS AB | NORTHEAST UTILITIES vs. Darden Restaurants | NORTHEAST UTILITIES vs. Reliance Steel Aluminum | NORTHEAST UTILITIES vs. Q2M Managementberatung AG |
| CSSC Offshore vs. Lion One Metals | CSSC Offshore vs. PARKEN Sport Entertainment | CSSC Offshore vs. POWER METALS | CSSC Offshore vs. Insurance Australia Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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