Correlation Between Cboe UK and Northern Bear
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By analyzing existing cross correlation between Cboe UK Consumer and Northern Bear Plc, you can compare the effects of market volatilities on Cboe UK and Northern Bear 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 Cboe UK with a short position of Northern Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and Northern Bear.
Diversification Opportunities for Cboe UK and Northern Bear
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cboe and Northern is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer and Northern Bear Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Bear Plc and Cboe UK 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 Cboe UK Consumer are associated (or correlated) with Northern Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Bear Plc has no effect on the direction of Cboe UK i.e., Cboe UK and Northern Bear go up and down completely randomly.
Pair Corralation between Cboe UK and Northern Bear
Assuming the 90 days trading horizon Cboe UK is expected to generate 1.28 times less return on investment than Northern Bear. But when comparing it to its historical volatility, Cboe UK Consumer is 2.74 times less risky than Northern Bear. It trades about 0.06 of its potential returns per unit of risk. Northern Bear Plc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,487 in Northern Bear Plc on September 19, 2024 and sell it today you would earn a total of 863.00 from holding Northern Bear Plc or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.01% |
| Values | Daily Returns |
Cboe UK Consumer vs. Northern Bear Plc
Performance |
| Timeline |
Cboe UK and Northern Bear Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
Northern Bear Plc
Pair trading matchups for Northern Bear
Pair Trading with Cboe UK and Northern Bear
The main advantage of trading using opposite Cboe UK and Northern Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK position performs unexpectedly, Northern Bear 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 Bear will offset losses from the drop in Northern Bear's long position.| Cboe UK vs. Porvair plc | Cboe UK vs. Norwegian Air Shuttle | Cboe UK vs. Batm Advanced Communications | Cboe UK vs. Charter Communications Cl |
| Northern Bear vs. Summit Materials Cl | Northern Bear vs. Molson Coors Beverage | Northern Bear vs. Axway Software SA | Northern Bear vs. Ecclesiastical Insurance Office |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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