Correlation Between Niagara Mohawk and Public Service
Can any of the company-specific risk be diversified away by investing in both Niagara Mohawk and Public Service 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 Niagara Mohawk and Public Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Niagara Mohawk Power and Public Service, you can compare the effects of market volatilities on Niagara Mohawk and Public Service 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 Niagara Mohawk with a short position of Public Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niagara Mohawk and Public Service.
Diversification Opportunities for Niagara Mohawk and Public Service
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Niagara and Public is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Niagara Mohawk Power and Public Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Service and Niagara Mohawk 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 Niagara Mohawk Power are associated (or correlated) with Public Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Service has no effect on the direction of Niagara Mohawk i.e., Niagara Mohawk and Public Service go up and down completely randomly.
Pair Corralation between Niagara Mohawk and Public Service
Assuming the 90 days horizon Niagara Mohawk Power is expected to generate 0.21 times more return on investment than Public Service. However, Niagara Mohawk Power is 4.73 times less risky than Public Service. It trades about 0.0 of its potential returns per unit of risk. Public Service is currently generating about -0.07 per unit of risk. If you would invest 5,542 in Niagara Mohawk Power on April 4, 2024 and sell it today you would earn a total of 0.00 from holding Niagara Mohawk Power or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 90.0% |
Values | Daily Returns |
Niagara Mohawk Power vs. Public Service
Performance |
Timeline |
Niagara Mohawk Power |
Public Service |
Niagara Mohawk and Public Service Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Niagara Mohawk and Public Service
The main advantage of trading using opposite Niagara Mohawk and Public Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niagara Mohawk position performs unexpectedly, Public Service 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 Public Service will offset losses from the drop in Public Service's long position.Niagara Mohawk vs. EVgo Equity Warrants | Niagara Mohawk vs. Nuvve Holding Corp | Niagara Mohawk vs. Microvast Holdings | Niagara Mohawk vs. Sligro Food Group |
Public Service vs. EDP Energias | Public Service vs. Niagara Mohawk Power | Public Service vs. The Siam Cement | Public Service vs. Oaktree Capital Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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