Correlation Between Northern Star and Group 6
Can any of the company-specific risk be diversified away by investing in both Northern Star and Group 6 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 Group 6 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 Group 6 Metals, you can compare the effects of market volatilities on Northern Star and Group 6 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 Group 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Star and Group 6.
Diversification Opportunities for Northern Star and Group 6
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northern and Group is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Northern Star Resources and Group 6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 6 Metals 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 Group 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 6 Metals has no effect on the direction of Northern Star i.e., Northern Star and Group 6 go up and down completely randomly.
Pair Corralation between Northern Star and Group 6
If you would invest 1,741 in Northern Star Resources on August 25, 2024 and sell it today you would earn a total of 49.00 from holding Northern Star Resources or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Star Resources vs. Group 6 Metals
Performance |
| Timeline |
| Northern Star Resources |
| Group 6 Metals |
Northern Star and Group 6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Star and Group 6
The main advantage of trading using opposite Northern Star and Group 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Star position performs unexpectedly, Group 6 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 Group 6 will offset losses from the drop in Group 6's long position.| Northern Star vs. RLF AgTech | Northern Star vs. Thorney Technologies | Northern Star vs. Zoom2u Technologies | Northern Star vs. Richmond Vanadium Technology |
| Group 6 vs. Northern Star Resources | Group 6 vs. Evolution Mining | Group 6 vs. Aneka Tambang Tbk | Group 6 vs. De Grey Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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