Correlation Between CELLULAR GOODS and Northern Data
Can any of the company-specific risk be diversified away by investing in both CELLULAR GOODS and Northern Data 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 CELLULAR GOODS and Northern Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CELLULAR GOODS LS and Northern Data AG, you can compare the effects of market volatilities on CELLULAR GOODS and Northern Data 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 CELLULAR GOODS with a short position of Northern Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of CELLULAR GOODS and Northern Data.
Diversification Opportunities for CELLULAR GOODS and Northern Data
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CELLULAR and Northern is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CELLULAR GOODS LS and Northern Data AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Data AG and CELLULAR GOODS 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 CELLULAR GOODS LS are associated (or correlated) with Northern Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Data AG has no effect on the direction of CELLULAR GOODS i.e., CELLULAR GOODS and Northern Data go up and down completely randomly.
Pair Corralation between CELLULAR GOODS and Northern Data
Assuming the 90 days horizon CELLULAR GOODS LS is expected to generate 5.95 times more return on investment than Northern Data. However, CELLULAR GOODS is 5.95 times more volatile than Northern Data AG. It trades about 0.1 of its potential returns per unit of risk. Northern Data AG is currently generating about 0.3 per unit of risk. If you would invest 0.05 in CELLULAR GOODS LS on October 11, 2024 and sell it today you would earn a total of 0.00 from holding CELLULAR GOODS LS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CELLULAR GOODS LS vs. Northern Data AG
Performance |
| Timeline |
| CELLULAR GOODS LS |
| Northern Data AG |
CELLULAR GOODS and Northern Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CELLULAR GOODS and Northern Data
The main advantage of trading using opposite CELLULAR GOODS and Northern Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CELLULAR GOODS position performs unexpectedly, Northern Data 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 Northern Data will offset losses from the drop in Northern Data's long position.| CELLULAR GOODS vs. Northern Data AG | CELLULAR GOODS vs. CNVISION MEDIA | CELLULAR GOODS vs. Hyrican Informationssysteme Aktiengesellschaft | CELLULAR GOODS vs. ZINC MEDIA GR |
| Northern Data vs. RELIANCE STEEL AL | Northern Data vs. NEW MILLENNIUM IRON | Northern Data vs. VELA TECHNOLPLC LS 0001 | Northern Data vs. STEEL DYNAMICS |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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