Correlation Between Northern Small and Sgi Peak
Can any of the company-specific risk be diversified away by investing in both Northern Small and Sgi Peak 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 Small and Sgi Peak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Small Cap and Sgi Peak Growth, you can compare the effects of market volatilities on Northern Small and Sgi Peak 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 Small with a short position of Sgi Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Small and Sgi Peak.
Diversification Opportunities for Northern Small and Sgi Peak
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NORTHERN and Sgi is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Northern Small Cap and Sgi Peak Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sgi Peak Growth and Northern Small 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 Small Cap are associated (or correlated) with Sgi Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sgi Peak Growth has no effect on the direction of Northern Small i.e., Northern Small and Sgi Peak go up and down completely randomly.
Pair Corralation between Northern Small and Sgi Peak
Assuming the 90 days horizon Northern Small Cap is expected to generate 2.29 times more return on investment than Sgi Peak. However, Northern Small is 2.29 times more volatile than Sgi Peak Growth. It trades about 0.28 of its potential returns per unit of risk. Sgi Peak Growth is currently generating about 0.36 per unit of risk. If you would invest 1,475 in Northern Small Cap on September 3, 2024 and sell it today you would earn a total of 145.00 from holding Northern Small Cap or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Small Cap vs. Sgi Peak Growth
Performance |
| Timeline |
| Northern Small Cap |
| Sgi Peak Growth |
Northern Small and Sgi Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Small and Sgi Peak
The main advantage of trading using opposite Northern Small and Sgi Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Small position performs unexpectedly, Sgi Peak 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 Sgi Peak will offset losses from the drop in Sgi Peak's long position.| Northern Small vs. Vanguard Small Cap Index | Northern Small vs. Vanguard Small Cap Index | Northern Small vs. Vanguard Small Cap Index | Northern Small vs. Vanguard Small Cap Index |
| Sgi Peak vs. Massmutual Premier Diversified | Sgi Peak vs. Blackrock Sm Cap | Sgi Peak vs. Wasatch Small Cap | Sgi Peak 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |