Correlation Between North Bay and Star Royalties
Can any of the company-specific risk be diversified away by investing in both North Bay and Star Royalties 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 North Bay and Star Royalties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Bay Resources and Star Royalties, you can compare the effects of market volatilities on North Bay and Star Royalties 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 North Bay with a short position of Star Royalties. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Bay and Star Royalties.
Diversification Opportunities for North Bay and Star Royalties
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between North and Star is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding North Bay Resources and Star Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Royalties and North Bay 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 North Bay Resources are associated (or correlated) with Star Royalties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Royalties has no effect on the direction of North Bay i.e., North Bay and Star Royalties go up and down completely randomly.
Pair Corralation between North Bay and Star Royalties
Given the investment horizon of 90 days North Bay Resources is expected to generate 4.12 times more return on investment than Star Royalties. However, North Bay is 4.12 times more volatile than Star Royalties. It trades about 0.09 of its potential returns per unit of risk. Star Royalties is currently generating about -0.11 per unit of risk. If you would invest 0.09 in North Bay Resources on September 13, 2024 and sell it today you would earn a total of 0.01 from holding North Bay Resources or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Bay Resources vs. Star Royalties
Performance |
| Timeline |
| North Bay Resources |
| Star Royalties |
North Bay and Star Royalties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Bay and Star Royalties
The main advantage of trading using opposite North Bay and Star Royalties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Bay position performs unexpectedly, Star Royalties 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 Star Royalties will offset losses from the drop in Star Royalties' long position.| North Bay vs. Diamond Fields Resources | North Bay vs. EnviroGold Global Limited | North Bay vs. Gemfields Group Limited | North Bay vs. Pacific Ridge Exploration |
| Star Royalties vs. Gold79 Mines | Star Royalties vs. Arctic Star Exploration | Star Royalties vs. Arras Minerals Corp | Star Royalties vs. American Creek Resources |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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