Correlation Between Ninepoint Energy and NBI High
Can any of the company-specific risk be diversified away by investing in both Ninepoint Energy and NBI High 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 Energy and NBI High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ninepoint Energy and NBI High Yield, you can compare the effects of market volatilities on Ninepoint Energy and NBI High 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 Energy with a short position of NBI High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ninepoint Energy and NBI High.
Diversification Opportunities for Ninepoint Energy and NBI High
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ninepoint and NBI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ninepoint Energy and NBI High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI High Yield and Ninepoint Energy 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 Energy are associated (or correlated) with NBI High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI High Yield has no effect on the direction of Ninepoint Energy i.e., Ninepoint Energy and NBI High go up and down completely randomly.
Pair Corralation between Ninepoint Energy and NBI High
Assuming the 90 days trading horizon Ninepoint Energy is expected to generate 3.82 times more return on investment than NBI High. However, Ninepoint Energy is 3.82 times more volatile than NBI High Yield. It trades about 0.02 of its potential returns per unit of risk. NBI High Yield is currently generating about 0.06 per unit of risk. If you would invest 4,944 in Ninepoint Energy on September 3, 2024 and sell it today you would earn a total of 48.00 from holding Ninepoint Energy or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ninepoint Energy vs. NBI High Yield
Performance |
| Timeline |
| Ninepoint Energy |
| NBI High Yield |
Ninepoint Energy and NBI High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ninepoint Energy and NBI High
The main advantage of trading using opposite Ninepoint Energy and NBI High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ninepoint Energy position performs unexpectedly, NBI High 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 NBI High will offset losses from the drop in NBI High's long position.| Ninepoint Energy vs. First Asset Energy | Ninepoint Energy vs. First Asset Tech | Ninepoint Energy vs. Harvest Equal Weight | Ninepoint Energy vs. CI Canada Lifeco |
| NBI High vs. NBI Unconstrained Fixed | NBI High vs. NBI Active Canadian | NBI High vs. NBI Sustainable Canadian | NBI High vs. Picton Mahoney Fortified |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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