Correlation Between Northern Trust and EQT AB
Can any of the company-specific risk be diversified away by investing in both Northern Trust and EQT AB 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 Trust and EQT AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Trust and EQT AB, you can compare the effects of market volatilities on Northern Trust and EQT AB 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 Trust with a short position of EQT AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Trust and EQT AB.
Diversification Opportunities for Northern Trust and EQT AB
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northern and EQT is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Northern Trust and EQT AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT AB and Northern Trust 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 Trust are associated (or correlated) with EQT AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT AB has no effect on the direction of Northern Trust i.e., Northern Trust and EQT AB go up and down completely randomly.
Pair Corralation between Northern Trust and EQT AB
Assuming the 90 days horizon Northern Trust is expected to generate 1.57 times less return on investment than EQT AB. But when comparing it to its historical volatility, Northern Trust is 1.5 times less risky than EQT AB. It trades about 0.04 of its potential returns per unit of risk. EQT AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,772 in EQT AB on August 31, 2024 and sell it today you would earn a total of 976.00 from holding EQT AB or generate 55.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Trust vs. EQT AB
Performance |
| Timeline |
| Northern Trust |
| EQT AB |
Northern Trust and EQT AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Trust and EQT AB
The main advantage of trading using opposite Northern Trust and EQT AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Trust position performs unexpectedly, EQT AB 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 EQT AB will offset losses from the drop in EQT AB's long position.| Northern Trust vs. Mitsui Chemicals | Northern Trust vs. Siamgas And Petrochemicals | Northern Trust vs. Alfa Financial Software | Northern Trust vs. VITEC SOFTWARE GROUP |
| EQT AB vs. LEGACY IRON ORE | EQT AB vs. BlueScope Steel Limited | EQT AB vs. Tianjin Capital Environmental | EQT AB vs. SERI INDUSTRIAL EO |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets |