Correlation Between US Global and Northern Trust
Can any of the company-specific risk be diversified away by investing in both US Global and Northern Trust 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 US Global and Northern Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and Northern Trust, you can compare the effects of market volatilities on US Global and Northern Trust 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 US Global with a short position of Northern Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Northern Trust.
Diversification Opportunities for US Global and Northern Trust
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GROW and Northern is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and Northern Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Trust and US Global 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 US Global Investors are associated (or correlated) with Northern Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Trust has no effect on the direction of US Global i.e., US Global and Northern Trust go up and down completely randomly.
Pair Corralation between US Global and Northern Trust
Given the investment horizon of 90 days US Global Investors is expected to under-perform the Northern Trust. In addition to that, US Global is 1.06 times more volatile than Northern Trust. It trades about -0.02 of its total potential returns per unit of risk. Northern Trust is currently generating about 0.25 per unit of volatility. If you would invest 10,188 in Northern Trust on August 27, 2024 and sell it today you would earn a total of 758.00 from holding Northern Trust or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. Northern Trust
Performance |
| Timeline |
| US Global Investors |
| Northern Trust |
US Global and Northern Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Northern Trust
The main advantage of trading using opposite US Global and Northern Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global position performs unexpectedly, Northern Trust 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 Trust will offset losses from the drop in Northern Trust's long position.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
| Northern Trust vs. Bank of New | Northern Trust vs. Invesco Plc | Northern Trust vs. Franklin Resources | Northern Trust vs. T Rowe Price |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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