Correlation Between Archer Exploration and Northern Star
Can any of the company-specific risk be diversified away by investing in both Archer Exploration and Northern Star 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 Archer Exploration and Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Exploration and Northern Star Resources, you can compare the effects of market volatilities on Archer Exploration and Northern Star 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 Archer Exploration with a short position of Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Exploration and Northern Star.
Diversification Opportunities for Archer Exploration and Northern Star
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Archer and Northern is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Archer Exploration and Northern Star Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Star Resources and Archer Exploration 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 Archer Exploration are associated (or correlated) with Northern Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Star Resources has no effect on the direction of Archer Exploration i.e., Archer Exploration and Northern Star go up and down completely randomly.
Pair Corralation between Archer Exploration and Northern Star
Assuming the 90 days trading horizon Archer Exploration is expected to generate 3.19 times more return on investment than Northern Star. However, Archer Exploration is 3.19 times more volatile than Northern Star Resources. It trades about 0.07 of its potential returns per unit of risk. Northern Star Resources is currently generating about 0.1 per unit of risk. If you would invest 24.00 in Archer Exploration on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Archer Exploration or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Archer Exploration vs. Northern Star Resources
Performance |
| Timeline |
| Archer Exploration |
| Northern Star Resources |
Archer Exploration and Northern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Exploration and Northern Star
The main advantage of trading using opposite Archer Exploration and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Exploration position performs unexpectedly, Northern Star 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 Star will offset losses from the drop in Northern Star's long position.| Archer Exploration vs. Platinum Asia Investments | Archer Exploration vs. Carlton Investments | Archer Exploration vs. Hotel Property Investments | Archer Exploration vs. Alternative Investment Trust |
| Northern Star vs. Pinnacle Investment Management | Northern Star vs. Diversified United Investment | Northern Star vs. Data3 | Northern Star vs. Stelar Metals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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