Correlation Between Duketon Mining and Northern Star
Can any of the company-specific risk be diversified away by investing in both Duketon Mining 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 Duketon Mining and Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duketon Mining and Northern Star Resources, you can compare the effects of market volatilities on Duketon Mining 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 Duketon Mining with a short position of Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duketon Mining and Northern Star.
Diversification Opportunities for Duketon Mining and Northern Star
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Duketon and Northern is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Duketon Mining 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 Duketon Mining 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 Duketon Mining 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 Duketon Mining i.e., Duketon Mining and Northern Star go up and down completely randomly.
Pair Corralation between Duketon Mining and Northern Star
Assuming the 90 days trading horizon Duketon Mining is expected to generate 5.09 times less return on investment than Northern Star. In addition to that, Duketon Mining is 2.6 times more volatile than Northern Star Resources. It trades about 0.01 of its total potential returns per unit of risk. Northern Star Resources is currently generating about 0.1 per unit of volatility. If you would invest 1,262 in Northern Star Resources on September 30, 2024 and sell it today you would earn a total of 298.00 from holding Northern Star Resources or generate 23.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duketon Mining vs. Northern Star Resources
Performance |
| Timeline |
| Duketon Mining |
| Northern Star Resources |
Duketon Mining and Northern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duketon Mining and Northern Star
The main advantage of trading using opposite Duketon Mining and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duketon Mining 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.| Duketon Mining vs. Insignia Financial | Duketon Mining vs. Dexus Convenience Retail | Duketon Mining vs. Treasury Wine Estates | Duketon Mining vs. Kkr Credit Income |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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