Correlation Between NorthWestern and EnGene Holdings
Can any of the company-specific risk be diversified away by investing in both NorthWestern and EnGene Holdings 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 NorthWestern and EnGene Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NorthWestern and enGene Holdings Warrants, you can compare the effects of market volatilities on NorthWestern and EnGene Holdings 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 NorthWestern with a short position of EnGene Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NorthWestern and EnGene Holdings.
Diversification Opportunities for NorthWestern and EnGene Holdings
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NorthWestern and EnGene is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NorthWestern and enGene Holdings Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enGene Holdings Warrants and NorthWestern 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 NorthWestern are associated (or correlated) with EnGene Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enGene Holdings Warrants has no effect on the direction of NorthWestern i.e., NorthWestern and EnGene Holdings go up and down completely randomly.
Pair Corralation between NorthWestern and EnGene Holdings
Considering the 90-day investment horizon NorthWestern is expected to generate 0.15 times more return on investment than EnGene Holdings. However, NorthWestern is 6.66 times less risky than EnGene Holdings. It trades about 0.05 of its potential returns per unit of risk. enGene Holdings Warrants is currently generating about -0.05 per unit of risk. If you would invest 5,212 in NorthWestern on November 1, 2024 and sell it today you would earn a total of 207.00 from holding NorthWestern or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.67% |
| Values | Daily Returns |
NorthWestern vs. enGene Holdings Warrants
Performance |
| Timeline |
| NorthWestern |
| enGene Holdings Warrants |
NorthWestern and EnGene Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NorthWestern and EnGene Holdings
The main advantage of trading using opposite NorthWestern and EnGene Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorthWestern position performs unexpectedly, EnGene Holdings 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 EnGene Holdings will offset losses from the drop in EnGene Holdings' long position.| NorthWestern vs. Allete Inc | NorthWestern vs. Black Hills | NorthWestern vs. Otter Tail | NorthWestern vs. Avista |
| EnGene Holdings vs. Empresa Distribuidora y | EnGene Holdings vs. East West Bancorp | EnGene Holdings vs. CenterPoint Energy | EnGene Holdings vs. NorthWestern |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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