Correlation Between Northland Power and SIEM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Northland Power and SIEM OFFSHORE 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 Northland Power and SIEM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northland Power and SIEM OFFSHORE NEW, you can compare the effects of market volatilities on Northland Power and SIEM OFFSHORE 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 Northland Power with a short position of SIEM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northland Power and SIEM OFFSHORE.
Diversification Opportunities for Northland Power and SIEM OFFSHORE
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northland and SIEM is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Northland Power and SIEM OFFSHORE NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEM OFFSHORE NEW and Northland Power 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 Northland Power are associated (or correlated) with SIEM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEM OFFSHORE NEW has no effect on the direction of Northland Power i.e., Northland Power and SIEM OFFSHORE go up and down completely randomly.
Pair Corralation between Northland Power and SIEM OFFSHORE
Assuming the 90 days horizon Northland Power is expected to under-perform the SIEM OFFSHORE. But the stock apears to be less risky and, when comparing its historical volatility, Northland Power is 1.19 times less risky than SIEM OFFSHORE. The stock trades about -0.02 of its potential returns per unit of risk. The SIEM OFFSHORE NEW is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 147.00 in SIEM OFFSHORE NEW on December 4, 2024 and sell it today you would earn a total of 30.00 from holding SIEM OFFSHORE NEW or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Northland Power vs. SIEM OFFSHORE NEW
Performance |
| Timeline |
| Northland Power |
| SIEM OFFSHORE NEW |
Northland Power and SIEM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northland Power and SIEM OFFSHORE
The main advantage of trading using opposite Northland Power and SIEM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northland Power position performs unexpectedly, SIEM OFFSHORE 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 SIEM OFFSHORE will offset losses from the drop in SIEM OFFSHORE's long position.| Northland Power vs. Gol Intelligent Airlines | Northland Power vs. Singapore Airlines Limited | Northland Power vs. RCS Mediagroup SpA | Northland Power vs. PROSIEBENSAT1 MEDIADR4 |
| SIEM OFFSHORE vs. ITALIAN WINE BRANDS | SIEM OFFSHORE vs. ELMOS SEMICONDUCTOR | SIEM OFFSHORE vs. BE Semiconductor Industries | SIEM OFFSHORE vs. ZhongAn Online P |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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