Correlation Between ManhattanLimited and North Bay
Can any of the company-specific risk be diversified away by investing in both ManhattanLimited and North Bay 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 ManhattanLimited and North Bay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manhattan Limited and North Bay Resources, you can compare the effects of market volatilities on ManhattanLimited and North Bay 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 ManhattanLimited with a short position of North Bay. Check out your portfolio center. Please also check ongoing floating volatility patterns of ManhattanLimited and North Bay.
Diversification Opportunities for ManhattanLimited and North Bay
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ManhattanLimited and North is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Limited and North Bay Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Bay Resources and ManhattanLimited 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 Manhattan Limited are associated (or correlated) with North Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Bay Resources has no effect on the direction of ManhattanLimited i.e., ManhattanLimited and North Bay go up and down completely randomly.
Pair Corralation between ManhattanLimited and North Bay
Assuming the 90 days horizon Manhattan Limited is expected to under-perform the North Bay. But the pink sheet apears to be less risky and, when comparing its historical volatility, Manhattan Limited is 3.09 times less risky than North Bay. The pink sheet trades about -0.29 of its potential returns per unit of risk. The North Bay Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 0.11 in North Bay Resources on September 1, 2024 and sell it today you would lose (0.02) from holding North Bay Resources or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Manhattan Limited vs. North Bay Resources
Performance |
| Timeline |
| Manhattan Limited |
| North Bay Resources |
ManhattanLimited and North Bay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ManhattanLimited and North Bay
The main advantage of trading using opposite ManhattanLimited and North Bay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ManhattanLimited position performs unexpectedly, North Bay 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 North Bay will offset losses from the drop in North Bay's long position.| ManhattanLimited vs. Defiance Silver Corp | ManhattanLimited vs. HUMANA INC | ManhattanLimited vs. SCOR PK | ManhattanLimited vs. Aquagold International |
| North Bay vs. Defiance Silver Corp | North Bay vs. HUMANA INC | North Bay vs. SCOR PK | North Bay vs. Aquagold International |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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