Correlation Between Northstar Clean and Bowhead Specialty
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and Bowhead Specialty 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 Bowhead Specialty 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 Bowhead Specialty Holdings, you can compare the effects of market volatilities on Northstar Clean and Bowhead Specialty 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 Bowhead Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Bowhead Specialty.
Diversification Opportunities for Northstar Clean and Bowhead Specialty
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northstar and Bowhead is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Bowhead Specialty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowhead Specialty 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 Bowhead Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowhead Specialty has no effect on the direction of Northstar Clean i.e., Northstar Clean and Bowhead Specialty go up and down completely randomly.
Pair Corralation between Northstar Clean and Bowhead Specialty
Assuming the 90 days horizon Northstar Clean Technologies is expected to under-perform the Bowhead Specialty. In addition to that, Northstar Clean is 2.2 times more volatile than Bowhead Specialty Holdings. It trades about -0.24 of its total potential returns per unit of risk. Bowhead Specialty Holdings is currently generating about 0.22 per unit of volatility. If you would invest 3,183 in Bowhead Specialty Holdings on November 9, 2024 and sell it today you would earn a total of 196.00 from holding Bowhead Specialty Holdings or generate 6.16% 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. Bowhead Specialty Holdings
Performance |
| Timeline |
| Northstar Clean Tech |
| Bowhead Specialty |
Northstar Clean and Bowhead Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and Bowhead Specialty
The main advantage of trading using opposite Northstar Clean and Bowhead Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, Bowhead Specialty 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 Bowhead Specialty will offset losses from the drop in Bowhead Specialty's long position.| Northstar Clean vs. Susglobal Energy Corp | Northstar Clean vs. LanzaTech Global | Northstar Clean vs. Aqua Metals | Northstar Clean vs. LiCycle Holdings Corp |
| Bowhead Specialty vs. East Africa Metals | Bowhead Specialty vs. The Cheesecake Factory | Bowhead Specialty vs. El Pollo Loco | Bowhead Specialty vs. Summit Materials |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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