Correlation Between Northern Data and TSOGO SUN
Can any of the company-specific risk be diversified away by investing in both Northern Data and TSOGO SUN 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 TSOGO SUN 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 TSOGO SUN GAMING, you can compare the effects of market volatilities on Northern Data and TSOGO SUN 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 TSOGO SUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Data and TSOGO SUN.
Diversification Opportunities for Northern Data and TSOGO SUN
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northern and TSOGO is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Northern Data AG and TSOGO SUN GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSOGO SUN GAMING 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 TSOGO SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSOGO SUN GAMING has no effect on the direction of Northern Data i.e., Northern Data and TSOGO SUN go up and down completely randomly.
Pair Corralation between Northern Data and TSOGO SUN
Assuming the 90 days trading horizon Northern Data is expected to generate 1.14 times less return on investment than TSOGO SUN. But when comparing it to its historical volatility, Northern Data AG is 2.74 times less risky than TSOGO SUN. It trades about 0.2 of its potential returns per unit of risk. TSOGO SUN GAMING is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 24.00 in TSOGO SUN GAMING on November 3, 2024 and sell it today you would earn a total of 22.00 from holding TSOGO SUN GAMING or generate 91.67% 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. TSOGO SUN GAMING
Performance |
| Timeline |
| Northern Data AG |
| TSOGO SUN GAMING |
Northern Data and TSOGO SUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Data and TSOGO SUN
The main advantage of trading using opposite Northern Data and TSOGO SUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Data position performs unexpectedly, TSOGO SUN 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 TSOGO SUN will offset losses from the drop in TSOGO SUN's long position.| Northern Data vs. ANTA SPORTS PRODUCT | Northern Data vs. SPORT LISBOA E | Northern Data vs. BJs Restaurants | Northern Data vs. Tower Semiconductor |
| TSOGO SUN vs. Las Vegas Sands | TSOGO SUN vs. Galaxy Entertainment Group | TSOGO SUN vs. Sands China | TSOGO SUN vs. Entain Plc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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