Correlation Between Huntsman Exploration and Northern Dynasty
Can any of the company-specific risk be diversified away by investing in both Huntsman Exploration 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 Huntsman Exploration and Northern Dynasty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntsman Exploration and Northern Dynasty Minerals, you can compare the effects of market volatilities on Huntsman Exploration 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 Huntsman Exploration with a short position of Northern Dynasty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntsman Exploration and Northern Dynasty.
Diversification Opportunities for Huntsman Exploration and Northern Dynasty
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huntsman and Northern is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Huntsman Exploration 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 Huntsman 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 Huntsman Exploration 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 Huntsman Exploration i.e., Huntsman Exploration and Northern Dynasty go up and down completely randomly.
Pair Corralation between Huntsman Exploration and Northern Dynasty
Assuming the 90 days horizon Huntsman Exploration is expected to under-perform the Northern Dynasty. In addition to that, Huntsman Exploration is 1.98 times more volatile than Northern Dynasty Minerals. It trades about -0.22 of its total potential returns per unit of risk. Northern Dynasty Minerals is currently generating about 0.22 per unit of volatility. If you would invest 44.00 in Northern Dynasty Minerals on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Northern Dynasty Minerals or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntsman Exploration vs. Northern Dynasty Minerals
Performance |
| Timeline |
| Huntsman Exploration |
| Northern Dynasty Minerals |
Huntsman Exploration and Northern Dynasty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntsman Exploration and Northern Dynasty
The main advantage of trading using opposite Huntsman Exploration and Northern Dynasty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntsman Exploration 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.| Huntsman Exploration vs. Qubec Nickel Corp | Huntsman Exploration vs. IGO Limited | Huntsman Exploration vs. Focus Graphite | Huntsman Exploration vs. Mineral Res |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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