Correlation Between Northann Corp and Patrick Industries
Can any of the company-specific risk be diversified away by investing in both Northann Corp and Patrick Industries 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 Northann Corp and Patrick Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northann Corp and Patrick Industries, you can compare the effects of market volatilities on Northann Corp and Patrick Industries 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 Northann Corp with a short position of Patrick Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northann Corp and Patrick Industries.
Diversification Opportunities for Northann Corp and Patrick Industries
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northann and Patrick is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Northann Corp and Patrick Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patrick Industries and Northann Corp 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 Northann Corp are associated (or correlated) with Patrick Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patrick Industries has no effect on the direction of Northann Corp i.e., Northann Corp and Patrick Industries go up and down completely randomly.
Pair Corralation between Northann Corp and Patrick Industries
Considering the 90-day investment horizon Northann Corp is expected to generate 4.18 times more return on investment than Patrick Industries. However, Northann Corp is 4.18 times more volatile than Patrick Industries. It trades about 0.15 of its potential returns per unit of risk. Patrick Industries is currently generating about 0.0 per unit of risk. If you would invest 19.00 in Northann Corp on August 30, 2024 and sell it today you would earn a total of 6.00 from holding Northann Corp or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northann Corp vs. Patrick Industries
Performance |
| Timeline |
| Northann Corp |
| Patrick Industries |
Northann Corp and Patrick Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northann Corp and Patrick Industries
The main advantage of trading using opposite Northann Corp and Patrick Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northann Corp position performs unexpectedly, Patrick Industries 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 Patrick Industries will offset losses from the drop in Patrick Industries' long position.| Northann Corp vs. Microchip Technology | Northann Corp vs. Willamette Valley Vineyards | Northann Corp vs. China Tontine Wines | Northann Corp vs. Constellation Brands Class |
| Patrick Industries vs. Bassett Furniture Industries | Patrick Industries vs. Ethan Allen Interiors | Patrick Industries vs. Natuzzi SpA | Patrick Industries vs. Flexsteel Industries |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |