Correlation Between Superior Plus and Northland Power
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Northland Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Northland Power, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Northland Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Northland Power.
Diversification Opportunities for Superior Plus and Northland Power
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Superior and Northland is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Northland Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northland Power and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Northland Power go up and down completely randomly.
Pair Corralation between Superior Plus and Northland Power
Assuming the 90 days horizon Superior Plus is expected to generate 33.38 times less return on investment than Northland Power. In addition to that, Superior Plus is 1.06 times more volatile than Northland Power. It trades about 0.0 of its total potential returns per unit of risk. Northland Power is currently generating about 0.06 per unit of volatility. If you would invest 1,215 in Northland Power on October 14, 2024 and sell it today you would earn a total of 19.00 from holding Northland Power or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Northland Power
Performance |
| Timeline |
| Superior Plus Corp |
| Northland Power |
Superior Plus and Northland Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Northland Power
The main advantage of trading using opposite Superior Plus and Northland Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. GREENX METALS LTD | Superior Plus vs. Forsys Metals Corp | Superior Plus vs. American Eagle Outfitters | Superior Plus vs. G III Apparel Group |
| Northland Power vs. Power Assets Holdings | Northland Power vs. Superior Plus Corp | Northland Power vs. NMI Holdings | Northland Power vs. SIVERS SEMICONDUCTORS AB |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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