Correlation Between Northern Star and Akora Resources
Can any of the company-specific risk be diversified away by investing in both Northern Star and Akora 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 Akora 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 Akora Resources, you can compare the effects of market volatilities on Northern Star and Akora 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 Akora Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Star and Akora Resources.
Diversification Opportunities for Northern Star and Akora Resources
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northern and Akora is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Northern Star Resources and Akora Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akora 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 Akora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akora Resources has no effect on the direction of Northern Star i.e., Northern Star and Akora Resources go up and down completely randomly.
Pair Corralation between Northern Star and Akora Resources
Assuming the 90 days trading horizon Northern Star Resources is expected to generate 0.57 times more return on investment than Akora Resources. However, Northern Star Resources is 1.76 times less risky than Akora Resources. It trades about 0.0 of its potential returns per unit of risk. Akora Resources is currently generating about -0.15 per unit of risk. If you would invest 1,700 in Northern Star Resources on September 12, 2024 and sell it today you would lose (7.00) from holding Northern Star Resources or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Northern Star Resources vs. Akora Resources
Performance |
| Timeline |
| Northern Star Resources |
| Akora Resources |
Northern Star and Akora Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Star and Akora Resources
The main advantage of trading using opposite Northern Star and Akora Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Star position performs unexpectedly, Akora 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 Akora Resources will offset losses from the drop in Akora Resources' long position.| Northern Star vs. Pinnacle Investment Management | Northern Star vs. Diversified United Investment | Northern Star vs. Data3 | Northern Star vs. Stelar Metals |
| Akora Resources vs. EMvision Medical Devices | Akora Resources vs. Data3 | Akora Resources vs. Autosports Group | Akora Resources vs. Flagship Investments |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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