Correlation Between Northern Star and Astral Resources
Can any of the company-specific risk be diversified away by investing in both Northern Star and Astral Resources 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 Star and Astral Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Star Resources and Astral Resources NL, you can compare the effects of market volatilities on Northern Star and Astral Resources 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 Star with a short position of Astral Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Star and Astral Resources.
Diversification Opportunities for Northern Star and Astral Resources
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northern and Astral is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Northern Star Resources and Astral Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Resources and Northern Star 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 Star Resources are associated (or correlated) with Astral Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Resources has no effect on the direction of Northern Star i.e., Northern Star and Astral Resources go up and down completely randomly.
Pair Corralation between Northern Star and Astral Resources
Assuming the 90 days trading horizon Northern Star is expected to generate 2.17 times less return on investment than Astral Resources. But when comparing it to its historical volatility, Northern Star Resources is 2.7 times less risky than Astral Resources. It trades about 0.14 of its potential returns per unit of risk. Astral Resources NL is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9.70 in Astral Resources NL on September 2, 2024 and sell it today you would earn a total of 3.30 from holding Astral Resources NL or generate 34.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Star Resources vs. Astral Resources NL
Performance |
| Timeline |
| Northern Star Resources |
| Astral Resources |
Northern Star and Astral Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Star and Astral Resources
The main advantage of trading using opposite Northern Star and Astral Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Star position performs unexpectedly, Astral Resources 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 Astral Resources will offset losses from the drop in Astral Resources' long position.| Northern Star vs. Readytech Holdings | Northern Star vs. Autosports Group | Northern Star vs. Aristocrat Leisure | Northern Star vs. Ragnar Metals |
| Astral Resources vs. REGAL ASIAN INVESTMENTS | Astral Resources vs. Hotel Property Investments | Astral Resources vs. Group 6 Metals | Astral Resources vs. ACDC Metals |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |