Correlation Between Ninepoint Diversified and Ninepoint Energy
Can any of the company-specific risk be diversified away by investing in both Ninepoint Diversified and Ninepoint Energy 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 Ninepoint Diversified and Ninepoint Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ninepoint Diversified Bond and Ninepoint Energy Income, you can compare the effects of market volatilities on Ninepoint Diversified and Ninepoint Energy 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 Ninepoint Diversified with a short position of Ninepoint Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ninepoint Diversified and Ninepoint Energy.
Diversification Opportunities for Ninepoint Diversified and Ninepoint Energy
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ninepoint and Ninepoint is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ninepoint Diversified Bond and Ninepoint Energy Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ninepoint Energy Income and Ninepoint Diversified 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 Ninepoint Diversified Bond are associated (or correlated) with Ninepoint Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ninepoint Energy Income has no effect on the direction of Ninepoint Diversified i.e., Ninepoint Diversified and Ninepoint Energy go up and down completely randomly.
Pair Corralation between Ninepoint Diversified and Ninepoint Energy
Assuming the 90 days trading horizon Ninepoint Diversified Bond is expected to generate 0.22 times more return on investment than Ninepoint Energy. However, Ninepoint Diversified Bond is 4.63 times less risky than Ninepoint Energy. It trades about 0.19 of its potential returns per unit of risk. Ninepoint Energy Income is currently generating about -0.05 per unit of risk. If you would invest 1,709 in Ninepoint Diversified Bond on September 3, 2024 and sell it today you would earn a total of 146.00 from holding Ninepoint Diversified Bond or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ninepoint Diversified Bond vs. Ninepoint Energy Income
Performance |
| Timeline |
| Ninepoint Diversified |
| Ninepoint Energy Income |
Ninepoint Diversified and Ninepoint Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ninepoint Diversified and Ninepoint Energy
The main advantage of trading using opposite Ninepoint Diversified and Ninepoint Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ninepoint Diversified position performs unexpectedly, Ninepoint Energy 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 Ninepoint Energy will offset losses from the drop in Ninepoint Energy's long position.| Ninepoint Diversified vs. BetaPro SPTSX Capped | Ninepoint Diversified vs. BetaPro SPTSX 60 | Ninepoint Diversified vs. BetaPro SP 500 | Ninepoint Diversified vs. BetaPro NASDAQ 100 2x |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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