Correlation Between Midnight Sun and Northern Graphite
Can any of the company-specific risk be diversified away by investing in both Midnight Sun and Northern Graphite 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 Midnight Sun and Northern Graphite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midnight Sun Mining and Northern Graphite, you can compare the effects of market volatilities on Midnight Sun and Northern Graphite 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 Midnight Sun with a short position of Northern Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midnight Sun and Northern Graphite.
Diversification Opportunities for Midnight Sun and Northern Graphite
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Midnight and Northern is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Midnight Sun Mining and Northern Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Graphite and Midnight Sun 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 Midnight Sun Mining are associated (or correlated) with Northern Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Graphite has no effect on the direction of Midnight Sun i.e., Midnight Sun and Northern Graphite go up and down completely randomly.
Pair Corralation between Midnight Sun and Northern Graphite
Assuming the 90 days horizon Midnight Sun Mining is expected to under-perform the Northern Graphite. But the stock apears to be less risky and, when comparing its historical volatility, Midnight Sun Mining is 1.7 times less risky than Northern Graphite. The stock trades about -0.12 of its potential returns per unit of risk. The Northern Graphite is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Northern Graphite on September 1, 2024 and sell it today you would lose (0.50) from holding Northern Graphite or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Midnight Sun Mining vs. Northern Graphite
Performance |
| Timeline |
| Midnight Sun Mining |
| Northern Graphite |
Midnight Sun and Northern Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midnight Sun and Northern Graphite
The main advantage of trading using opposite Midnight Sun and Northern Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midnight Sun position performs unexpectedly, Northern Graphite 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 Graphite will offset losses from the drop in Northern Graphite's long position.| Midnight Sun vs. New Destiny Mining | Midnight Sun vs. Magnum Goldcorp | Midnight Sun vs. Asiabasemetals | Midnight Sun vs. Lupaka Gold Corp |
| Northern Graphite vs. Focus Graphite | Northern Graphite vs. Mason Graphite | Northern Graphite vs. Lomiko Metals | Northern Graphite vs. Graphite One |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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