Correlation Between FRN and Northern Lights
Can any of the company-specific risk be diversified away by investing in both FRN and Northern Lights 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 FRN and Northern Lights into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FRN and Northern Lights, you can compare the effects of market volatilities on FRN and Northern Lights 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 FRN with a short position of Northern Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of FRN and Northern Lights.
Diversification Opportunities for FRN and Northern Lights
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FRN and Northern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FRN and Northern Lights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lights and FRN 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 FRN are associated (or correlated) with Northern Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lights has no effect on the direction of FRN i.e., FRN and Northern Lights go up and down completely randomly.
Pair Corralation between FRN and Northern Lights
If you would invest 2,905 in Northern Lights on September 14, 2024 and sell it today you would earn a total of 671.00 from holding Northern Lights or generate 23.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
FRN vs. Northern Lights
Performance |
| Timeline |
| FRN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Northern Lights |
FRN and Northern Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FRN and Northern Lights
The main advantage of trading using opposite FRN and Northern Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FRN position performs unexpectedly, Northern Lights 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 Lights will offset losses from the drop in Northern Lights' long position.| FRN vs. FT Vest Equity | FRN vs. Zillow Group Class | FRN vs. Northern Lights | FRN vs. VanEck Vectors Moodys |
| Northern Lights vs. iShares Factors Growth | Northern Lights vs. Absolute Core Strategy | Northern Lights vs. iShares ESG Advanced | Northern Lights vs. PIMCO RAFI Dynamic |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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