Correlation Between Emetals and Northern Star
Can any of the company-specific risk be diversified away by investing in both Emetals 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 Emetals and Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emetals and Northern Star Resources, you can compare the effects of market volatilities on Emetals 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 Emetals with a short position of Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emetals and Northern Star.
Diversification Opportunities for Emetals and Northern Star
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emetals and Northern is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Emetals 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 Emetals 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 Emetals 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 Emetals i.e., Emetals and Northern Star go up and down completely randomly.
Pair Corralation between Emetals and Northern Star
If you would invest 0.50 in Emetals on September 22, 2024 and sell it today you would earn a total of 0.00 from holding Emetals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emetals vs. Northern Star Resources
Performance |
| Timeline |
| Emetals |
| Northern Star Resources |
Emetals and Northern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emetals and Northern Star
The main advantage of trading using opposite Emetals and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emetals 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.| Emetals vs. Northern Star Resources | Emetals vs. Evolution Mining | Emetals vs. Bluescope Steel | Emetals vs. Sandfire Resources NL |
| Northern Star vs. A1 Investments Resources | Northern Star vs. Auctus Alternative Investments | Northern Star vs. Bluescope Steel | Northern Star vs. Pinnacle Investment Management |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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