Correlation Between MAGNUM MINING and NORTHEAST UTILITIES

Can any of the company-specific risk be diversified away by investing in both MAGNUM MINING 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 MAGNUM MINING and NORTHEAST UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAGNUM MINING EXP and NORTHEAST UTILITIES, you can compare the effects of market volatilities on MAGNUM MINING 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 MAGNUM MINING with a short position of NORTHEAST UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGNUM MINING and NORTHEAST UTILITIES.

Diversification Opportunities for MAGNUM MINING and NORTHEAST UTILITIES

-0.72

Correlation Coefficient

MAGNUM MINING  NORTHEAST UTILITIES

Pay attention - limited upside

The 3 months correlation between MAGNUM and NORTHEAST is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding MAGNUM MINING EXP and NORTHEAST UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHEAST UTILITIES and MAGNUM MINING 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 MAGNUM MINING EXP 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 MAGNUM MINING i.e., MAGNUM MINING and NORTHEAST UTILITIES go up and down completely randomly.

Pair Corralation between MAGNUM MINING and NORTHEAST UTILITIES

Assuming the 90 days trading horizon MAGNUM MINING EXP is expected to under-perform the NORTHEAST UTILITIES. In addition to that, MAGNUM MINING is 1.94 times more volatile than NORTHEAST UTILITIES. It trades about -0.13 of its total potential returns per unit of risk. NORTHEAST UTILITIES is currently generating about 0.04 per unit of volatility. If you would invest  5,436  in NORTHEAST UTILITIES on December 22, 2024 and sell it today you would earn a total of  164.00  from holding NORTHEAST UTILITIES or generate 3.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MAGNUM MINING EXP  vs.  NORTHEAST UTILITIES

MAGNUM MINING EXP

Risk-Adjusted Performance

Very Weak

Over the last 90 days MAGNUM MINING EXP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

NORTHEAST UTILITIES

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NORTHEAST UTILITIES are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking indicators, NORTHEAST UTILITIES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MAGNUM MINING and NORTHEAST UTILITIES

The main advantage of trading using opposite MAGNUM MINING and NORTHEAST UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGNUM MINING 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.

The idea behind MAGNUM MINING EXP and NORTHEAST UTILITIES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.