Correlation Between SOGECLAIR and Northland Power
Can any of the company-specific risk be diversified away by investing in both SOGECLAIR and Northland Power 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 SOGECLAIR and Northland Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOGECLAIR SA INH and Northland Power, you can compare the effects of market volatilities on SOGECLAIR and Northland Power 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 SOGECLAIR with a short position of Northland Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOGECLAIR and Northland Power.
Diversification Opportunities for SOGECLAIR and Northland Power
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOGECLAIR and Northland is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH and Northland Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northland Power and SOGECLAIR 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 SOGECLAIR SA INH are associated (or correlated) with Northland Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northland Power has no effect on the direction of SOGECLAIR i.e., SOGECLAIR and Northland Power go up and down completely randomly.
Pair Corralation between SOGECLAIR and Northland Power
Assuming the 90 days horizon SOGECLAIR SA INH is expected to generate 2.63 times more return on investment than Northland Power. However, SOGECLAIR is 2.63 times more volatile than Northland Power. It trades about 0.14 of its potential returns per unit of risk. Northland Power is currently generating about 0.08 per unit of risk. If you would invest 1,815 in SOGECLAIR SA INH on October 12, 2024 and sell it today you would earn a total of 195.00 from holding SOGECLAIR SA INH or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOGECLAIR SA INH vs. Northland Power
Performance |
| Timeline |
| SOGECLAIR SA INH |
| Northland Power |
SOGECLAIR and Northland Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOGECLAIR and Northland Power
The main advantage of trading using opposite SOGECLAIR and Northland Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOGECLAIR position performs unexpectedly, Northland Power 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 Northland Power will offset losses from the drop in Northland Power's long position.| SOGECLAIR vs. Liberty Broadband | SOGECLAIR vs. TRAINLINE PLC LS | SOGECLAIR vs. GOLD ROAD RES | SOGECLAIR vs. EVS Broadcast Equipment |
| Northland Power vs. WIZZ AIR HLDGUNSPADR4 | Northland Power vs. Westinghouse Air Brake | Northland Power vs. SOGECLAIR SA INH | Northland Power vs. alstria office REIT AG |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |