Correlation Between Group 6 and Northern Star
Can any of the company-specific risk be diversified away by investing in both Group 6 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 Group 6 and Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 6 Metals and Northern Star Resources, you can compare the effects of market volatilities on Group 6 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 Group 6 with a short position of Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Northern Star.
Diversification Opportunities for Group 6 and Northern Star
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Group and Northern is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals 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 Group 6 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 Group 6 Metals 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 Group 6 i.e., Group 6 and Northern Star go up and down completely randomly.
Pair Corralation between Group 6 and Northern Star
If you would invest 1,728 in Northern Star Resources on August 28, 2024 and sell it today you would lose (10.00) from holding Northern Star Resources or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 6 Metals vs. Northern Star Resources
Performance |
| Timeline |
| Group 6 Metals |
| Northern Star Resources |
Group 6 and Northern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and Northern Star
The main advantage of trading using opposite Group 6 and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 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.| Group 6 vs. Northern Star Resources | Group 6 vs. Evolution Mining | Group 6 vs. Bluescope Steel | Group 6 vs. Sandfire Resources NL |
| Northern Star vs. Australian Unity Office | Northern Star vs. Centuria Industrial Reit | Northern Star vs. Green Technology Metals | Northern Star vs. Computershare |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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