Correlation Between Northern Lights and VIIX
Can any of the company-specific risk be diversified away by investing in both Northern Lights and VIIX 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 VIIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and VIIX, you can compare the effects of market volatilities on Northern Lights and VIIX 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 VIIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and VIIX.
Diversification Opportunities for Northern Lights and VIIX
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northern and VIIX is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and VIIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIIX 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 VIIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIIX has no effect on the direction of Northern Lights i.e., Northern Lights and VIIX go up and down completely randomly.
Pair Corralation between Northern Lights and VIIX
If you would invest 3,453 in Northern Lights on August 29, 2024 and sell it today you would earn a total of 132.00 from holding Northern Lights or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Northern Lights vs. VIIX
Performance |
| Timeline |
| Northern Lights |
| VIIX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northern Lights and VIIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lights and VIIX
The main advantage of trading using opposite Northern Lights and VIIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights position performs unexpectedly, VIIX 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 VIIX will offset losses from the drop in VIIX's long position.| Northern Lights vs. Invesco Dynamic Large | Northern Lights vs. Perella Weinberg Partners | Northern Lights vs. HUMANA INC | Northern Lights vs. Aquagold International |
| VIIX vs. FT Vest Equity | VIIX vs. Zillow Group Class | VIIX vs. Northern Lights | VIIX vs. VanEck Vectors Moodys |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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