Correlation Between Northern Star and Duketon Mining
Can any of the company-specific risk be diversified away by investing in both Northern Star and Duketon Mining 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 Duketon Mining 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 Duketon Mining, you can compare the effects of market volatilities on Northern Star and Duketon Mining 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 Duketon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Star and Duketon Mining.
Diversification Opportunities for Northern Star and Duketon Mining
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Northern and Duketon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Northern Star Resources and Duketon Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duketon Mining 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 Duketon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duketon Mining has no effect on the direction of Northern Star i.e., Northern Star and Duketon Mining go up and down completely randomly.
Pair Corralation between Northern Star and Duketon Mining
Assuming the 90 days trading horizon Northern Star Resources is expected to generate 0.39 times more return on investment than Duketon Mining. However, Northern Star Resources is 2.6 times less risky than Duketon Mining. It trades about 0.1 of its potential returns per unit of risk. Duketon Mining is currently generating about 0.01 per unit of risk. If you would invest 1,269 in Northern Star Resources on September 29, 2024 and sell it today you would earn a total of 291.00 from holding Northern Star Resources or generate 22.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Star Resources vs. Duketon Mining
Performance |
| Timeline |
| Northern Star Resources |
| Duketon Mining |
Northern Star and Duketon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Star and Duketon Mining
The main advantage of trading using opposite Northern Star and Duketon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Star position performs unexpectedly, Duketon Mining 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 Duketon Mining will offset losses from the drop in Duketon Mining's long position.| Northern Star vs. Evolution Mining | Northern Star vs. Aneka Tambang Tbk | Northern Star vs. Sandfire Resources NL | Northern Star vs. De Grey Mining |
| Duketon Mining vs. Northern Star Resources | Duketon Mining vs. Evolution Mining | Duketon Mining vs. Bluescope Steel | Duketon Mining vs. Aneka Tambang Tbk |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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