Correlation Between Radisson Mining and Northern Star
Can any of the company-specific risk be diversified away by investing in both Radisson Mining and Northern Star 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 Radisson Mining and Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radisson Mining Resources and Northern Star Resources, you can compare the effects of market volatilities on Radisson Mining and Northern Star 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 Radisson Mining with a short position of Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radisson Mining and Northern Star.
Diversification Opportunities for Radisson Mining and Northern Star
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Radisson and Northern is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Radisson Mining Resources and Northern Star Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Star Resources and Radisson Mining 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 Radisson Mining Resources are associated (or correlated) with Northern Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Star Resources has no effect on the direction of Radisson Mining i.e., Radisson Mining and Northern Star go up and down completely randomly.
Pair Corralation between Radisson Mining and Northern Star
Assuming the 90 days horizon Radisson Mining Resources is expected to under-perform the Northern Star. In addition to that, Radisson Mining is 1.83 times more volatile than Northern Star Resources. It trades about -0.16 of its total potential returns per unit of risk. Northern Star Resources is currently generating about -0.01 per unit of volatility. If you would invest 1,147 in Northern Star Resources on August 27, 2024 and sell it today you would lose (17.00) from holding Northern Star Resources or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Radisson Mining Resources vs. Northern Star Resources
Performance |
| Timeline |
| Radisson Mining Resources |
| Northern Star Resources |
Radisson Mining and Northern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radisson Mining and Northern Star
The main advantage of trading using opposite Radisson Mining and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radisson Mining position performs unexpectedly, Northern Star 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 Star will offset losses from the drop in Northern Star's long position.| Radisson Mining vs. Northern Superior Resources | Radisson Mining vs. American Pacific Mining | Radisson Mining vs. Arizona Metals Corp | Radisson Mining vs. Roscan Gold Corp |
| Northern Star vs. Regis Resources | Northern Star vs. West African Resources | Northern Star vs. Dundee Precious Metals | Northern Star vs. Maple Gold Mines |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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