Correlation Between SCANDMEDICAL SOLDK and Northland Power
Can any of the company-specific risk be diversified away by investing in both SCANDMEDICAL SOLDK and Northland Power 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 SCANDMEDICAL SOLDK and Northland Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANDMEDICAL SOLDK 040 and Northland Power, you can compare the effects of market volatilities on SCANDMEDICAL SOLDK and Northland Power 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 SCANDMEDICAL SOLDK with a short position of Northland Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDMEDICAL SOLDK and Northland Power.
Diversification Opportunities for SCANDMEDICAL SOLDK and Northland Power
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCANDMEDICAL and Northland is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SCANDMEDICAL SOLDK 040 and Northland Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northland Power and SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK 040 are associated (or correlated) with Northland Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northland Power has no effect on the direction of SCANDMEDICAL SOLDK i.e., SCANDMEDICAL SOLDK and Northland Power go up and down completely randomly.
Pair Corralation between SCANDMEDICAL SOLDK and Northland Power
Assuming the 90 days horizon SCANDMEDICAL SOLDK 040 is expected to generate 1.15 times more return on investment than Northland Power. However, SCANDMEDICAL SOLDK is 1.15 times more volatile than Northland Power. It trades about -0.01 of its potential returns per unit of risk. Northland Power is currently generating about -0.01 per unit of risk. If you would invest 93.00 in SCANDMEDICAL SOLDK 040 on September 14, 2024 and sell it today you would lose (16.00) from holding SCANDMEDICAL SOLDK 040 or give up 17.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANDMEDICAL SOLDK 040 vs. Northland Power
Performance |
| Timeline |
| SCANDMEDICAL SOLDK 040 |
| Northland Power |
SCANDMEDICAL SOLDK and Northland Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANDMEDICAL SOLDK and Northland Power
The main advantage of trading using opposite SCANDMEDICAL SOLDK and Northland Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDMEDICAL SOLDK position performs unexpectedly, Northland Power 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 Northland Power will offset losses from the drop in Northland Power's long position.| SCANDMEDICAL SOLDK vs. Align Technology | SCANDMEDICAL SOLDK vs. Superior Plus Corp | SCANDMEDICAL SOLDK vs. SIVERS SEMICONDUCTORS AB | SCANDMEDICAL SOLDK vs. Norsk Hydro ASA |
| Northland Power vs. Dairy Farm International | Northland Power vs. SIEM OFFSHORE NEW | Northland Power vs. Martin Marietta Materials | Northland Power vs. Rayonier Advanced Materials |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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