Correlation Between Northern Lion and Park Electrochemical
Can any of the company-specific risk be diversified away by investing in both Northern Lion and Park Electrochemical 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 Lion and Park Electrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lion Gold and Park Electrochemical, you can compare the effects of market volatilities on Northern Lion and Park Electrochemical 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 Lion with a short position of Park Electrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lion and Park Electrochemical.
Diversification Opportunities for Northern Lion and Park Electrochemical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northern and Park is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lion Gold and Park Electrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Electrochemical and Northern Lion 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 Lion Gold are associated (or correlated) with Park Electrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Electrochemical has no effect on the direction of Northern Lion i.e., Northern Lion and Park Electrochemical go up and down completely randomly.
Pair Corralation between Northern Lion and Park Electrochemical
If you would invest 1,413 in Park Electrochemical on September 14, 2024 and sell it today you would earn a total of 64.00 from holding Park Electrochemical or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Northern Lion Gold vs. Park Electrochemical
Performance |
| Timeline |
| Northern Lion Gold |
| Park Electrochemical |
Northern Lion and Park Electrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lion and Park Electrochemical
The main advantage of trading using opposite Northern Lion and Park Electrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lion position performs unexpectedly, Park Electrochemical 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 Park Electrochemical will offset losses from the drop in Park Electrochemical's long position.| Northern Lion vs. NH Foods Ltd | Northern Lion vs. FitLife Brands, Common | Northern Lion vs. AMCON Distributing | Northern Lion vs. IPG Photonics |
| Park Electrochemical vs. Innovative Solutions and | Park Electrochemical vs. VSE Corporation | Park Electrochemical vs. Curtiss Wright | Park Electrochemical vs. Ducommun Incorporated |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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