Correlation Between NORTHROP and Transportadora
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By analyzing existing cross correlation between NORTHROP GRUMMAN P and Transportadora de Gas, you can compare the effects of market volatilities on NORTHROP and Transportadora 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 NORTHROP with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHROP and Transportadora.
Diversification Opportunities for NORTHROP and Transportadora
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NORTHROP and Transportadora is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NORTHROP GRUMMAN P and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas and NORTHROP 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 NORTHROP GRUMMAN P are associated (or correlated) with Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of NORTHROP i.e., NORTHROP and Transportadora go up and down completely randomly.
Pair Corralation between NORTHROP and Transportadora
Assuming the 90 days trading horizon NORTHROP GRUMMAN P is expected to under-perform the Transportadora. But the bond apears to be less risky and, when comparing its historical volatility, NORTHROP GRUMMAN P is 3.51 times less risky than Transportadora. The bond trades about -0.01 of its potential returns per unit of risk. The Transportadora de Gas is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,892 in Transportadora de Gas on September 12, 2024 and sell it today you would earn a total of 963.00 from holding Transportadora de Gas or generate 50.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.0% |
| Values | Daily Returns |
NORTHROP GRUMMAN P vs. Transportadora de Gas
Performance |
| Timeline |
| NORTHROP GRUMMAN P |
| Transportadora de Gas |
NORTHROP and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHROP and Transportadora
The main advantage of trading using opposite NORTHROP and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHROP position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| NORTHROP vs. Luxfer Holdings PLC | NORTHROP vs. Siriuspoint | NORTHROP vs. United Fire Group | NORTHROP vs. Citizens |
| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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