Correlation Between Northern Lights and Advocate Capital
Can any of the company-specific risk be diversified away by investing in both Northern Lights and Advocate Capital 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 Advocate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and Advocate Capital Management, you can compare the effects of market volatilities on Northern Lights and Advocate Capital 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 Advocate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and Advocate Capital.
Diversification Opportunities for Northern Lights and Advocate Capital
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northern and Advocate is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and Advocate Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advocate Capital Man 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 Advocate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advocate Capital Man has no effect on the direction of Northern Lights i.e., Northern Lights and Advocate Capital go up and down completely randomly.
Pair Corralation between Northern Lights and Advocate Capital
If you would invest 2,959 in Northern Lights on August 30, 2024 and sell it today you would earn a total of 39.00 from holding Northern Lights or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Northern Lights vs. Advocate Capital Management
Performance |
| Timeline |
| Northern Lights |
| Advocate Capital Man |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northern Lights and Advocate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lights and Advocate Capital
The main advantage of trading using opposite Northern Lights and Advocate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights position performs unexpectedly, Advocate Capital 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 Advocate Capital will offset losses from the drop in Advocate Capital's long position.| Northern Lights vs. Northern Lights | Northern Lights vs. Northern Lights | Northern Lights vs. ETF Series Solutions | Northern Lights vs. Mairs Power Minnesota |
| Advocate Capital vs. Alpha Architect Gdsdn | Advocate Capital vs. VanEck Inflation Allocation | Advocate Capital vs. ClearShares OCIO ETF | Advocate Capital vs. Northern Lights |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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