Correlation Between Northstar Clean and Enbridge Pref
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By analyzing existing cross correlation between Northstar Clean Technologies and Enbridge Pref 5, you can compare the effects of market volatilities on Northstar Clean and Enbridge Pref 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 Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Enbridge Pref.
Diversification Opportunities for Northstar Clean and Enbridge Pref
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northstar and Enbridge is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Enbridge Pref 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 5 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 Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 5 has no effect on the direction of Northstar Clean i.e., Northstar Clean and Enbridge Pref go up and down completely randomly.
Pair Corralation between Northstar Clean and Enbridge Pref
Assuming the 90 days trading horizon Northstar Clean Technologies is expected to generate 2.71 times more return on investment than Enbridge Pref. However, Northstar Clean is 2.71 times more volatile than Enbridge Pref 5. It trades about 0.04 of its potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.04 per unit of risk. If you would invest 17.00 in Northstar Clean Technologies on August 30, 2024 and sell it today you would earn a total of 11.00 from holding Northstar Clean Technologies or generate 64.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Northstar Clean Technologies vs. Enbridge Pref 5
Performance |
| Timeline |
| Northstar Clean Tech |
| Enbridge Pref 5 |
Northstar Clean and Enbridge Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and Enbridge Pref
The main advantage of trading using opposite Northstar Clean and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, Enbridge Pref 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 Enbridge Pref will offset losses from the drop in Enbridge Pref's long position.| Northstar Clean vs. Cielo Waste Solutions | Northstar Clean vs. Forstrong Global Income | Northstar Clean vs. Terreno Resources Corp | Northstar Clean vs. iShares Canadian HYBrid |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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