Correlation Between Asia Broadband and Northern Dynasty
Can any of the company-specific risk be diversified away by investing in both Asia Broadband and Northern Dynasty 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 Asia Broadband and Northern Dynasty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Broadband and Northern Dynasty Minerals, you can compare the effects of market volatilities on Asia Broadband and Northern Dynasty 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 Asia Broadband with a short position of Northern Dynasty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Broadband and Northern Dynasty.
Diversification Opportunities for Asia Broadband and Northern Dynasty
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Northern is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Asia Broadband and Northern Dynasty Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Dynasty Minerals and Asia Broadband 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 Asia Broadband are associated (or correlated) with Northern Dynasty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Dynasty Minerals has no effect on the direction of Asia Broadband i.e., Asia Broadband and Northern Dynasty go up and down completely randomly.
Pair Corralation between Asia Broadband and Northern Dynasty
Given the investment horizon of 90 days Asia Broadband is expected to generate 1.44 times less return on investment than Northern Dynasty. In addition to that, Asia Broadband is 1.36 times more volatile than Northern Dynasty Minerals. It trades about 0.05 of its total potential returns per unit of risk. Northern Dynasty Minerals is currently generating about 0.1 per unit of volatility. If you would invest 27.00 in Northern Dynasty Minerals on November 9, 2024 and sell it today you would earn a total of 47.00 from holding Northern Dynasty Minerals or generate 174.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Asia Broadband vs. Northern Dynasty Minerals
Performance |
| Timeline |
| Asia Broadband |
| Northern Dynasty Minerals |
Asia Broadband and Northern Dynasty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Broadband and Northern Dynasty
The main advantage of trading using opposite Asia Broadband and Northern Dynasty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Broadband position performs unexpectedly, Northern Dynasty 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 Dynasty will offset losses from the drop in Northern Dynasty's long position.| Asia Broadband vs. Fury Gold Mines | Asia Broadband vs. Lion Copper and | Asia Broadband vs. Trilogy Metals | Asia Broadband vs. Western Copper and |
| Northern Dynasty vs. Vizsla Resources Corp | Northern Dynasty vs. Western Copper and | Northern Dynasty vs. Americas Silver Corp | Northern Dynasty vs. EMX Royalty Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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