Correlation Between Lykos Metals and Northern Star
Can any of the company-specific risk be diversified away by investing in both Lykos Metals 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 Lykos Metals and Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lykos Metals and Northern Star Resources, you can compare the effects of market volatilities on Lykos Metals 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 Lykos Metals with a short position of Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lykos Metals and Northern Star.
Diversification Opportunities for Lykos Metals and Northern Star
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lykos and Northern is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lykos 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 Lykos Metals 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 Lykos 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 Lykos Metals i.e., Lykos Metals and Northern Star go up and down completely randomly.
Pair Corralation between Lykos Metals and Northern Star
Assuming the 90 days trading horizon Lykos Metals is expected to under-perform the Northern Star. In addition to that, Lykos Metals is 2.72 times more volatile than Northern Star Resources. It trades about -0.06 of its total potential returns per unit of risk. Northern Star Resources is currently generating about 0.04 per unit of volatility. If you would invest 1,193 in Northern Star Resources on October 11, 2024 and sell it today you would earn a total of 413.00 from holding Northern Star Resources or generate 34.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lykos Metals vs. Northern Star Resources
Performance |
| Timeline |
| Lykos Metals |
| Northern Star Resources |
Lykos Metals and Northern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lykos Metals and Northern Star
The main advantage of trading using opposite Lykos Metals and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lykos Metals 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.| Lykos Metals vs. Firstwave Cloud Technology | Lykos Metals vs. Ras Technology Holdings | Lykos Metals vs. Sonic Healthcare | Lykos Metals vs. BTC Health Limited |
| Northern Star vs. Hudson Investment Group | Northern Star vs. Alternative Investment Trust | Northern Star vs. BlackWall Property Funds | Northern Star vs. ARN Media Limited |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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