Correlation Between Northern Data and SERI INDUSTRIAL
Can any of the company-specific risk be diversified away by investing in both Northern Data and SERI INDUSTRIAL 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 SERI INDUSTRIAL 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 SERI INDUSTRIAL EO, you can compare the effects of market volatilities on Northern Data and SERI INDUSTRIAL 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 SERI INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Data and SERI INDUSTRIAL.
Diversification Opportunities for Northern Data and SERI INDUSTRIAL
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northern and SERI is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Northern Data AG and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO 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 SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of Northern Data i.e., Northern Data and SERI INDUSTRIAL go up and down completely randomly.
Pair Corralation between Northern Data and SERI INDUSTRIAL
Assuming the 90 days trading horizon Northern Data AG is expected to generate 0.58 times more return on investment than SERI INDUSTRIAL. However, Northern Data AG is 1.73 times less risky than SERI INDUSTRIAL. It trades about -0.28 of its potential returns per unit of risk. SERI INDUSTRIAL EO is currently generating about -0.2 per unit of risk. If you would invest 5,030 in Northern Data AG on November 4, 2024 and sell it today you would lose (545.00) from holding Northern Data AG or give up 10.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Northern Data AG vs. SERI INDUSTRIAL EO
Performance |
Timeline |
Northern Data AG |
SERI INDUSTRIAL EO |
Northern Data and SERI INDUSTRIAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Northern Data and SERI INDUSTRIAL
The main advantage of trading using opposite Northern Data and SERI INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Data position performs unexpectedly, SERI INDUSTRIAL 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 SERI INDUSTRIAL will offset losses from the drop in SERI INDUSTRIAL's long position.Northern Data vs. Major Drilling Group | Northern Data vs. PREMIER FOODS | Northern Data vs. AWILCO DRILLING PLC | Northern Data vs. COLUMBIA SPORTSWEAR |
SERI INDUSTRIAL vs. JAPAN AIRLINES | SERI INDUSTRIAL vs. Major Drilling Group | SERI INDUSTRIAL vs. AWILCO DRILLING PLC | SERI INDUSTRIAL vs. China Eastern Airlines |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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