Correlation Between Northern Star and Anson Resources
Can any of the company-specific risk be diversified away by investing in both Northern Star and Anson 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 Anson 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 Anson Resources, you can compare the effects of market volatilities on Northern Star and Anson 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 Anson Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Star and Anson Resources.
Diversification Opportunities for Northern Star and Anson Resources
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northern and Anson is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Northern Star Resources and Anson Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anson 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 Anson Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anson Resources has no effect on the direction of Northern Star i.e., Northern Star and Anson Resources go up and down completely randomly.
Pair Corralation between Northern Star and Anson Resources
Assuming the 90 days trading horizon Northern Star Resources is expected to generate 0.32 times more return on investment than Anson Resources. However, Northern Star Resources is 3.09 times less risky than Anson Resources. It trades about 0.11 of its potential returns per unit of risk. Anson Resources is currently generating about -0.08 per unit of risk. If you would invest 1,411 in Northern Star Resources on August 29, 2024 and sell it today you would earn a total of 351.00 from holding Northern Star Resources or generate 24.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Star Resources vs. Anson Resources
Performance |
| Timeline |
| Northern Star Resources |
| Anson Resources |
Northern Star and Anson Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Star and Anson Resources
The main advantage of trading using opposite Northern Star and Anson Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Star position performs unexpectedly, Anson 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 Anson Resources will offset losses from the drop in Anson Resources' long position.| Northern Star vs. Hutchison Telecommunications | Northern Star vs. National Storage REIT | Northern Star vs. ACDC Metals | Northern Star vs. MotorCycle Holdings |
| Anson Resources vs. Northern Star Resources | Anson Resources vs. Evolution Mining | Anson Resources vs. Bluescope Steel | Anson Resources vs. Sandfire Resources NL |
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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