Correlation Between RTL Group and NORTHEAST UTILITIES
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By analyzing existing cross correlation between RTL Group SA and NORTHEAST UTILITIES, you can compare the effects of market volatilities on RTL Group 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 RTL Group with a short position of NORTHEAST UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTL Group and NORTHEAST UTILITIES.
Diversification Opportunities for RTL Group and NORTHEAST UTILITIES
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between RTL and NORTHEAST is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA and NORTHEAST UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHEAST UTILITIES and RTL Group 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 RTL Group SA 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 RTL Group i.e., RTL Group and NORTHEAST UTILITIES go up and down completely randomly.
Pair Corralation between RTL Group and NORTHEAST UTILITIES
Assuming the 90 days trading horizon RTL Group SA is expected to under-perform the NORTHEAST UTILITIES. In addition to that, RTL Group is 1.49 times more volatile than NORTHEAST UTILITIES. It trades about -0.11 of its total potential returns per unit of risk. NORTHEAST UTILITIES is currently generating about 0.08 per unit of volatility. If you would invest 5,434 in NORTHEAST UTILITIES on September 1, 2024 and sell it today you would earn a total of 616.00 from holding NORTHEAST UTILITIES or generate 11.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
RTL Group SA vs. NORTHEAST UTILITIES
Performance |
| Timeline |
| RTL Group SA |
| NORTHEAST UTILITIES |
RTL Group and NORTHEAST UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTL Group and NORTHEAST UTILITIES
The main advantage of trading using opposite RTL Group and NORTHEAST UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group 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.| RTL Group vs. Performance Food Group | RTL Group vs. Mitsubishi Gas Chemical | RTL Group vs. PREMIER FOODS | RTL Group vs. CHEMICAL INDUSTRIES |
| NORTHEAST UTILITIES vs. SIVERS SEMICONDUCTORS AB | NORTHEAST UTILITIES vs. Darden Restaurants | NORTHEAST UTILITIES vs. Reliance Steel Aluminum | NORTHEAST UTILITIES vs. Q2M Managementberatung AG |
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