Correlation Between Marquee Resources and Northern Star
Can any of the company-specific risk be diversified away by investing in both Marquee Resources and Northern Star 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 Marquee Resources and Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marquee Resources and Northern Star Resources, you can compare the effects of market volatilities on Marquee Resources and Northern Star 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 Marquee Resources with a short position of Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marquee Resources and Northern Star.
Diversification Opportunities for Marquee Resources and Northern Star
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marquee and Northern is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Marquee Resources and Northern Star Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Star Resources and Marquee Resources 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 Marquee Resources are associated (or correlated) with Northern Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Star Resources has no effect on the direction of Marquee Resources i.e., Marquee Resources and Northern Star go up and down completely randomly.
Pair Corralation between Marquee Resources and Northern Star
Assuming the 90 days trading horizon Marquee Resources is expected to generate 56.89 times more return on investment than Northern Star. However, Marquee Resources is 56.89 times more volatile than Northern Star Resources. It trades about 0.09 of its potential returns per unit of risk. Northern Star Resources is currently generating about 0.11 per unit of risk. If you would invest 2.00 in Marquee Resources on August 27, 2024 and sell it today you would lose (0.50) from holding Marquee Resources or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Marquee Resources vs. Northern Star Resources
Performance |
| Timeline |
| Marquee Resources |
| Northern Star Resources |
Marquee Resources and Northern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marquee Resources and Northern Star
The main advantage of trading using opposite Marquee Resources and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marquee Resources position performs unexpectedly, Northern Star 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 Star will offset losses from the drop in Northern Star's long position.| Marquee Resources vs. Northern Star Resources | Marquee Resources vs. Evolution Mining | Marquee Resources vs. Bluescope Steel | Marquee Resources vs. Sandfire Resources NL |
| Northern Star vs. MFF Capital Investments | Northern Star vs. Mirrabooka Investments | Northern Star vs. Auctus Alternative Investments | Northern Star vs. Sandon Capital Investments |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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