Correlation Between Northern International and Northern High
Can any of the company-specific risk be diversified away by investing in both Northern International and Northern 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 Northern International and Northern High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern International Equity and Northern High Yield, you can compare the effects of market volatilities on Northern International and Northern 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 Northern International with a short position of Northern High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern International and Northern High.
Diversification Opportunities for Northern International and Northern High
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northern and Northern is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Northern International Equity and Northern High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern High Yield and Northern International 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 International Equity are associated (or correlated) with Northern High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern High Yield has no effect on the direction of Northern International i.e., Northern International and Northern High go up and down completely randomly.
Pair Corralation between Northern International and Northern High
Assuming the 90 days horizon Northern International Equity is expected to generate 2.62 times more return on investment than Northern High. However, Northern International is 2.62 times more volatile than Northern High Yield. It trades about 0.06 of its potential returns per unit of risk. Northern High Yield is currently generating about 0.13 per unit of risk. If you would invest 1,184 in Northern International Equity on August 30, 2024 and sell it today you would earn a total of 272.00 from holding Northern International Equity or generate 22.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern International Equity vs. Northern High Yield
Performance |
| Timeline |
| Northern International |
| Northern High Yield |
Northern International and Northern High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern International and Northern High
The main advantage of trading using opposite Northern International and Northern High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern International position performs unexpectedly, Northern 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 Northern High will offset losses from the drop in Northern High's long position.The idea behind Northern International Equity and Northern High Yield pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Northern High vs. Northern Emerging Markets | Northern High vs. Northern Global Real | Northern High vs. Northern International Equity | Northern High vs. Northern Small Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |