Correlation Between NORTHEAST UTILITIES and MTI WIRELESS
Can any of the company-specific risk be diversified away by investing in both NORTHEAST UTILITIES and MTI WIRELESS 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 MTI WIRELESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORTHEAST UTILITIES and MTI WIRELESS EDGE, you can compare the effects of market volatilities on NORTHEAST UTILITIES and MTI WIRELESS 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 MTI WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHEAST UTILITIES and MTI WIRELESS.
Diversification Opportunities for NORTHEAST UTILITIES and MTI WIRELESS
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NORTHEAST and MTI is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding NORTHEAST UTILITIES and MTI WIRELESS EDGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI WIRELESS EDGE 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 MTI WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI WIRELESS EDGE has no effect on the direction of NORTHEAST UTILITIES i.e., NORTHEAST UTILITIES and MTI WIRELESS go up and down completely randomly.
Pair Corralation between NORTHEAST UTILITIES and MTI WIRELESS
Assuming the 90 days trading horizon NORTHEAST UTILITIES is expected to generate 0.51 times more return on investment than MTI WIRELESS. However, NORTHEAST UTILITIES is 1.98 times less risky than MTI WIRELESS. It trades about 0.06 of its potential returns per unit of risk. MTI WIRELESS EDGE is currently generating about -0.13 per unit of risk. If you would invest 6,000 in NORTHEAST UTILITIES on August 31, 2024 and sell it today you would earn a total of 100.00 from holding NORTHEAST UTILITIES or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORTHEAST UTILITIES vs. MTI WIRELESS EDGE
Performance |
| Timeline |
| NORTHEAST UTILITIES |
| MTI WIRELESS EDGE |
NORTHEAST UTILITIES and MTI WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHEAST UTILITIES and MTI WIRELESS
The main advantage of trading using opposite NORTHEAST UTILITIES and MTI WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHEAST UTILITIES position performs unexpectedly, MTI WIRELESS 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 MTI WIRELESS will offset losses from the drop in MTI WIRELESS's long position.| NORTHEAST UTILITIES vs. STRAYER EDUCATION | NORTHEAST UTILITIES vs. REINET INVESTMENTS SCA | NORTHEAST UTILITIES vs. Virtus Investment Partners | NORTHEAST UTILITIES vs. Apollo Investment Corp |
| MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |