Correlation Between NYSE Composite and Northern Minerals
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Northern Minerals 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 NYSE Composite and Northern Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Northern Minerals Exploration, you can compare the effects of market volatilities on NYSE Composite and Northern Minerals 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 NYSE Composite with a short position of Northern Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Northern Minerals.
Diversification Opportunities for NYSE Composite and Northern Minerals
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Northern is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Northern Minerals Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Minerals and NYSE Composite 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 NYSE Composite are associated (or correlated) with Northern Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Minerals has no effect on the direction of NYSE Composite i.e., NYSE Composite and Northern Minerals go up and down completely randomly.
Pair Corralation between NYSE Composite and Northern Minerals
Assuming the 90 days trading horizon NYSE Composite is expected to generate 30.07 times less return on investment than Northern Minerals. But when comparing it to its historical volatility, NYSE Composite is 32.55 times less risky than Northern Minerals. It trades about 0.11 of its potential returns per unit of risk. Northern Minerals Exploration is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Northern Minerals Exploration on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Northern Minerals Exploration or generate 157.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Northern Minerals Exploration
Performance |
| Timeline |
NYSE Composite and Northern Minerals Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Northern Minerals Exploration
Pair trading matchups for Northern Minerals
Pair Trading with NYSE Composite and Northern Minerals
The main advantage of trading using opposite NYSE Composite and Northern Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Northern Minerals 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 Northern Minerals will offset losses from the drop in Northern Minerals' long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Northern Minerals vs. American Copper Development | Northern Minerals vs. Triple Flag Precious | Northern Minerals vs. Hecla Mining | Northern Minerals vs. Compania de Minas |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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