Correlation Between Northstar Clean and Themac Resources
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and Themac Resources 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 Themac Resources 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 Themac Resources Group, you can compare the effects of market volatilities on Northstar Clean and Themac Resources 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 Themac Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Themac Resources.
Diversification Opportunities for Northstar Clean and Themac Resources
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northstar and Themac is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Themac Resources Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themac Resources 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 Themac Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themac Resources has no effect on the direction of Northstar Clean i.e., Northstar Clean and Themac Resources go up and down completely randomly.
Pair Corralation between Northstar Clean and Themac Resources
Assuming the 90 days trading horizon Northstar Clean Technologies is expected to under-perform the Themac Resources. But the stock apears to be less risky and, when comparing its historical volatility, Northstar Clean Technologies is 9.77 times less risky than Themac Resources. The stock trades about -0.49 of its potential returns per unit of risk. The Themac Resources Group is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Themac Resources Group on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Themac Resources Group or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northstar Clean Technologies vs. Themac Resources Group
Performance |
| Timeline |
| Northstar Clean Tech |
| Themac Resources |
Northstar Clean and Themac Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and Themac Resources
The main advantage of trading using opposite Northstar Clean and Themac Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, Themac Resources 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 Themac Resources will offset losses from the drop in Themac Resources' long position.The idea behind Northstar Clean Technologies and Themac Resources Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Themac Resources vs. Plaza Retail REIT | Themac Resources vs. Toronto Dominion Bank | Themac Resources vs. TGS Esports | Themac Resources vs. Pollard Banknote Limited |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |