Correlation Between Northstar Clean and Amazon CDR
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and Amazon CDR 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 Northstar Clean and Amazon CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northstar Clean Technologies and Amazon CDR, you can compare the effects of market volatilities on Northstar Clean and Amazon CDR 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 Northstar Clean with a short position of Amazon CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Amazon CDR.
Diversification Opportunities for Northstar Clean and Amazon CDR
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Northstar and Amazon is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Amazon CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon CDR and Northstar Clean 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 Northstar Clean Technologies are associated (or correlated) with Amazon CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon CDR has no effect on the direction of Northstar Clean i.e., Northstar Clean and Amazon CDR go up and down completely randomly.
Pair Corralation between Northstar Clean and Amazon CDR
Assuming the 90 days trading horizon Northstar Clean Technologies is expected to generate 2.26 times more return on investment than Amazon CDR. However, Northstar Clean is 2.26 times more volatile than Amazon CDR. It trades about 0.25 of its potential returns per unit of risk. Amazon CDR is currently generating about 0.25 per unit of risk. If you would invest 27.00 in Northstar Clean Technologies on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Northstar Clean Technologies or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northstar Clean Technologies vs. Amazon CDR
Performance |
| Timeline |
| Northstar Clean Tech |
| Amazon CDR |
Northstar Clean and Amazon CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and Amazon CDR
The main advantage of trading using opposite Northstar Clean and Amazon CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, Amazon CDR 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 Amazon CDR will offset losses from the drop in Amazon CDR's long position.| Northstar Clean vs. Cielo Waste Solutions | Northstar Clean vs. CHAR Technologies | Northstar Clean vs. iShares Canadian HYBrid | Northstar Clean vs. Altagas Cum Red |
| Amazon CDR vs. Firan Technology Group | Amazon CDR vs. Canadian Utilities Limited | Amazon CDR vs. Ocumetics Technology Corp | Amazon CDR vs. Advent Wireless |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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