Correlation Between International Investors and Northern Global
Can any of the company-specific risk be diversified away by investing in both International Investors and Northern Global 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 International Investors and Northern Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Northern Global Real, you can compare the effects of market volatilities on International Investors and Northern Global 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 International Investors with a short position of Northern Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Northern Global.
Diversification Opportunities for International Investors and Northern Global
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between International and Northern is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Northern Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Global Real and International Investors 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 International Investors Gold are associated (or correlated) with Northern Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Global Real has no effect on the direction of International Investors i.e., International Investors and Northern Global go up and down completely randomly.
Pair Corralation between International Investors and Northern Global
Assuming the 90 days horizon International Investors Gold is expected to generate 2.25 times more return on investment than Northern Global. However, International Investors is 2.25 times more volatile than Northern Global Real. It trades about 0.1 of its potential returns per unit of risk. Northern Global Real is currently generating about 0.1 per unit of risk. If you would invest 1,026 in International Investors Gold on September 12, 2024 and sell it today you would earn a total of 227.00 from holding International Investors Gold or generate 22.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Northern Global Real
Performance |
| Timeline |
| International Investors |
| Northern Global Real |
International Investors and Northern Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Northern Global
The main advantage of trading using opposite International Investors and Northern Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, Northern Global 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 Global will offset losses from the drop in Northern Global's long position.| International Investors vs. Washington Mutual Investors | International Investors vs. Alternative Asset Allocation | International Investors vs. T Rowe Price | International Investors vs. Dodge Cox Stock |
| Northern Global vs. Gabelli Gold Fund | Northern Global vs. James Balanced Golden | Northern Global vs. Sprott Gold Equity | Northern Global vs. International Investors Gold |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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