Correlation Between Northern Lights and Iq Candriam
Can any of the company-specific risk be diversified away by investing in both Northern Lights and Iq Candriam 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 Northern Lights and Iq Candriam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and Iq Candriam ESG, you can compare the effects of market volatilities on Northern Lights and Iq Candriam 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 Northern Lights with a short position of Iq Candriam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and Iq Candriam.
Diversification Opportunities for Northern Lights and Iq Candriam
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Northern and IQSM is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and Iq Candriam ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iq Candriam ESG and Northern Lights 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 Northern Lights are associated (or correlated) with Iq Candriam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iq Candriam ESG has no effect on the direction of Northern Lights i.e., Northern Lights and Iq Candriam go up and down completely randomly.
Pair Corralation between Northern Lights and Iq Candriam
Given the investment horizon of 90 days Northern Lights is expected to generate 0.79 times more return on investment than Iq Candriam. However, Northern Lights is 1.27 times less risky than Iq Candriam. It trades about 0.1 of its potential returns per unit of risk. Iq Candriam ESG is currently generating about 0.06 per unit of risk. If you would invest 3,567 in Northern Lights on September 13, 2024 and sell it today you would earn a total of 51.01 from holding Northern Lights or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Northern Lights vs. Iq Candriam ESG
Performance |
| Timeline |
| Northern Lights |
| Iq Candriam ESG |
Northern Lights and Iq Candriam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lights and Iq Candriam
The main advantage of trading using opposite Northern Lights and Iq Candriam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights position performs unexpectedly, Iq Candriam 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 Iq Candriam will offset losses from the drop in Iq Candriam's long position.| Northern Lights vs. Sterling Capital Focus | Northern Lights vs. Northern Lights | Northern Lights vs. First Trust Exchange Traded | Northern Lights vs. Northern Lights |
| Iq Candriam vs. Vanguard Momentum Factor | Iq Candriam vs. Vanguard Multifactor | Iq Candriam vs. Vanguard Value Factor | Iq Candriam vs. Vanguard Minimum Volatility |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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