Correlation Between Northern Data and SOGECLAIR
Can any of the company-specific risk be diversified away by investing in both Northern Data and SOGECLAIR 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 Data and SOGECLAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Data AG and SOGECLAIR SA INH, you can compare the effects of market volatilities on Northern Data and SOGECLAIR 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 Data with a short position of SOGECLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Data and SOGECLAIR.
Diversification Opportunities for Northern Data and SOGECLAIR
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northern and SOGECLAIR is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Northern Data AG and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH and Northern Data 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 Data AG are associated (or correlated) with SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of Northern Data i.e., Northern Data and SOGECLAIR go up and down completely randomly.
Pair Corralation between Northern Data and SOGECLAIR
Assuming the 90 days trading horizon Northern Data AG is expected to generate 1.06 times more return on investment than SOGECLAIR. However, Northern Data is 1.06 times more volatile than SOGECLAIR SA INH. It trades about 0.16 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about 0.05 per unit of risk. If you would invest 3,760 in Northern Data AG on October 30, 2024 and sell it today you would earn a total of 840.00 from holding Northern Data AG or generate 22.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Data AG vs. SOGECLAIR SA INH
Performance |
| Timeline |
| Northern Data AG |
| SOGECLAIR SA INH |
Northern Data and SOGECLAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Data and SOGECLAIR
The main advantage of trading using opposite Northern Data and SOGECLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Data position performs unexpectedly, SOGECLAIR 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 SOGECLAIR will offset losses from the drop in SOGECLAIR's long position.| Northern Data vs. Coffee Holding Co | Northern Data vs. KENEDIX OFFICE INV | Northern Data vs. NURAN WIRELESS INC | Northern Data vs. FIREWEED METALS P |
| SOGECLAIR vs. Lamar Advertising | SOGECLAIR vs. Linedata Services SA | SOGECLAIR vs. Automatic Data Processing | SOGECLAIR vs. YATRA ONLINE DL 0001 |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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