Correlation Between Canaf Investments and Northstar Clean
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Northstar Clean 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 Canaf Investments and Northstar Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Northstar Clean Technologies, you can compare the effects of market volatilities on Canaf Investments and Northstar Clean 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 Canaf Investments with a short position of Northstar Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Northstar Clean.
Diversification Opportunities for Canaf Investments and Northstar Clean
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canaf and Northstar is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Northstar Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northstar Clean Tech and Canaf Investments 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 Canaf Investments are associated (or correlated) with Northstar Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northstar Clean Tech has no effect on the direction of Canaf Investments i.e., Canaf Investments and Northstar Clean go up and down completely randomly.
Pair Corralation between Canaf Investments and Northstar Clean
Assuming the 90 days horizon Canaf Investments is expected to under-perform the Northstar Clean. In addition to that, Canaf Investments is 1.03 times more volatile than Northstar Clean Technologies. It trades about -0.07 of its total potential returns per unit of risk. Northstar Clean Technologies is currently generating about 0.15 per unit of volatility. If you would invest 28.00 in Northstar Clean Technologies on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Northstar Clean Technologies or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Canaf Investments vs. Northstar Clean Technologies
Performance |
| Timeline |
| Canaf Investments |
| Northstar Clean Tech |
Canaf Investments and Northstar Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Northstar Clean
The main advantage of trading using opposite Canaf Investments and Northstar Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, Northstar Clean 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 Northstar Clean will offset losses from the drop in Northstar Clean's long position.| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Orezone Gold Corp | Canaf Investments vs. Faraday Copper 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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