Correlation Between NORTHEAST UTILITIES and Strix Group
Can any of the company-specific risk be diversified away by investing in both NORTHEAST UTILITIES and Strix Group 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 Strix Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORTHEAST UTILITIES and Strix Group Plc, you can compare the effects of market volatilities on NORTHEAST UTILITIES and Strix 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 Strix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHEAST UTILITIES and Strix Group.
Diversification Opportunities for NORTHEAST UTILITIES and Strix Group
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NORTHEAST and Strix is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NORTHEAST UTILITIES and Strix Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strix Group Plc 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 Strix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strix Group Plc has no effect on the direction of NORTHEAST UTILITIES i.e., NORTHEAST UTILITIES and Strix Group go up and down completely randomly.
Pair Corralation between NORTHEAST UTILITIES and Strix Group
Assuming the 90 days trading horizon NORTHEAST UTILITIES is expected to generate 0.45 times more return on investment than Strix Group. However, NORTHEAST UTILITIES is 2.23 times less risky than Strix Group. It trades about -0.05 of its potential returns per unit of risk. Strix Group Plc is currently generating about -0.28 per unit of risk. If you would invest 6,027 in NORTHEAST UTILITIES on September 12, 2024 and sell it today you would lose (277.00) from holding NORTHEAST UTILITIES or give up 4.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORTHEAST UTILITIES vs. Strix Group Plc
Performance |
| Timeline |
| NORTHEAST UTILITIES |
| Strix Group Plc |
NORTHEAST UTILITIES and Strix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHEAST UTILITIES and Strix Group
The main advantage of trading using opposite NORTHEAST UTILITIES and Strix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHEAST UTILITIES position performs unexpectedly, Strix 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 Strix Group will offset losses from the drop in Strix Group's long position.| NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc |
| Strix Group vs. ITALIAN WINE BRANDS | Strix Group vs. SANOK RUBBER ZY | Strix Group vs. The Yokohama Rubber | Strix Group vs. BRIT AMER TOBACCO |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |