Correlation Between PT Barito and NORTHEAST UTILITIES
Can any of the company-specific risk be diversified away by investing in both PT Barito and NORTHEAST UTILITIES 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 PT Barito and NORTHEAST UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Barito Pacific and NORTHEAST UTILITIES, you can compare the effects of market volatilities on PT Barito and NORTHEAST UTILITIES 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 PT Barito with a short position of NORTHEAST UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Barito and NORTHEAST UTILITIES.
Diversification Opportunities for PT Barito and NORTHEAST UTILITIES
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OB8 and NORTHEAST is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding PT Barito Pacific and NORTHEAST UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHEAST UTILITIES and PT Barito 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 PT Barito Pacific are associated (or correlated) with NORTHEAST UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHEAST UTILITIES has no effect on the direction of PT Barito i.e., PT Barito and NORTHEAST UTILITIES go up and down completely randomly.
Pair Corralation between PT Barito and NORTHEAST UTILITIES
Assuming the 90 days horizon PT Barito Pacific is expected to under-perform the NORTHEAST UTILITIES. In addition to that, PT Barito is 5.7 times more volatile than NORTHEAST UTILITIES. It trades about -0.07 of its total potential returns per unit of risk. NORTHEAST UTILITIES is currently generating about -0.02 per unit of volatility. If you would invest 6,150 in NORTHEAST UTILITIES on August 25, 2024 and sell it today you would lose (50.00) from holding NORTHEAST UTILITIES or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Barito Pacific vs. NORTHEAST UTILITIES
Performance |
| Timeline |
| PT Barito Pacific |
| NORTHEAST UTILITIES |
PT Barito and NORTHEAST UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Barito and NORTHEAST UTILITIES
The main advantage of trading using opposite PT Barito and NORTHEAST UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Barito position performs unexpectedly, NORTHEAST UTILITIES 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 NORTHEAST UTILITIES will offset losses from the drop in NORTHEAST UTILITIES's long position.| PT Barito vs. NORTHEAST UTILITIES | PT Barito vs. Universal Insurance Holdings | PT Barito vs. Ping An Insurance | PT Barito vs. QBE Insurance Group |
| NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES vs. Apple Inc | NORTHEAST UTILITIES 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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