Correlation Between Northstar Clean and International Tower
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and International Tower 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 International Tower 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 International Tower Hill, you can compare the effects of market volatilities on Northstar Clean and International Tower 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 International Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and International Tower.
Diversification Opportunities for Northstar Clean and International Tower
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northstar and International is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and International Tower Hill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Tower Hill 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 International Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Tower Hill has no effect on the direction of Northstar Clean i.e., Northstar Clean and International Tower go up and down completely randomly.
Pair Corralation between Northstar Clean and International Tower
Assuming the 90 days trading horizon Northstar Clean Technologies is expected to generate 0.77 times more return on investment than International Tower. However, Northstar Clean Technologies is 1.3 times less risky than International Tower. It trades about 0.14 of its potential returns per unit of risk. International Tower Hill is currently generating about -0.2 per unit of risk. If you would invest 25.00 in Northstar Clean Technologies on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Northstar Clean Technologies or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northstar Clean Technologies vs. International Tower Hill
Performance |
| Timeline |
| Northstar Clean Tech |
| International Tower Hill |
Northstar Clean and International Tower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and International Tower
The main advantage of trading using opposite Northstar Clean and International Tower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, International Tower 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 International Tower will offset losses from the drop in International Tower'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 |
| International Tower vs. First Majestic Silver | International Tower vs. Ivanhoe Energy | International Tower vs. Orezone Gold Corp | International Tower vs. Faraday Copper Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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