Correlation Between NORTHEAST UTILITIES and RTL Group
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By analyzing existing cross correlation between NORTHEAST UTILITIES and RTL Group SA, you can compare the effects of market volatilities on NORTHEAST UTILITIES and RTL Group 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 RTL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHEAST UTILITIES and RTL Group.
Diversification Opportunities for NORTHEAST UTILITIES and RTL Group
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between NORTHEAST and RTL is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding NORTHEAST UTILITIES and RTL Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL Group SA 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 RTL Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL Group SA has no effect on the direction of NORTHEAST UTILITIES i.e., NORTHEAST UTILITIES and RTL Group go up and down completely randomly.
Pair Corralation between NORTHEAST UTILITIES and RTL Group
Assuming the 90 days trading horizon NORTHEAST UTILITIES is expected to generate 0.42 times more return on investment than RTL Group. However, NORTHEAST UTILITIES is 2.41 times less risky than RTL Group. It trades about -0.02 of its potential returns per unit of risk. RTL Group SA is currently generating about -0.25 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 Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NORTHEAST UTILITIES vs. RTL Group SA
Performance |
| Timeline |
| NORTHEAST UTILITIES |
| RTL Group SA |
NORTHEAST UTILITIES and RTL Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHEAST UTILITIES and RTL Group
The main advantage of trading using opposite NORTHEAST UTILITIES and RTL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHEAST UTILITIES position performs unexpectedly, RTL Group 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 RTL Group will offset losses from the drop in RTL Group'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 |
| RTL Group vs. Performance Food Group | RTL Group vs. Mitsubishi Gas Chemical | RTL Group vs. PREMIER FOODS | RTL Group vs. CHEMICAL INDUSTRIES |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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