Correlation Between Northstar Clean and BAIYU Holdings
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and BAIYU Holdings 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 BAIYU Holdings 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 BAIYU Holdings, you can compare the effects of market volatilities on Northstar Clean and BAIYU Holdings 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 BAIYU Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and BAIYU Holdings.
Diversification Opportunities for Northstar Clean and BAIYU Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northstar and BAIYU is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and BAIYU Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAIYU Holdings 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 BAIYU Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAIYU Holdings has no effect on the direction of Northstar Clean i.e., Northstar Clean and BAIYU Holdings go up and down completely randomly.
Pair Corralation between Northstar Clean and BAIYU Holdings
Assuming the 90 days horizon Northstar Clean Technologies is expected to generate 0.95 times more return on investment than BAIYU Holdings. However, Northstar Clean Technologies is 1.05 times less risky than BAIYU Holdings. It trades about 0.28 of its potential returns per unit of risk. BAIYU Holdings is currently generating about -0.17 per unit of risk. If you would invest 15.00 in Northstar Clean Technologies on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Northstar Clean Technologies or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 69.05% |
| Values | Daily Returns |
Northstar Clean Technologies vs. BAIYU Holdings
Performance |
| Timeline |
| Northstar Clean Tech |
| BAIYU Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northstar Clean and BAIYU Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and BAIYU Holdings
The main advantage of trading using opposite Northstar Clean and BAIYU Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, BAIYU Holdings 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 BAIYU Holdings will offset losses from the drop in BAIYU Holdings' long position.| Northstar Clean vs. Ecoloclean Industrs | Northstar Clean vs. Ecosciences | Northstar Clean vs. JPX Global | Northstar Clean vs. Majic Wheels Corp |
| BAIYU Holdings vs. Cleantech Power Corp | BAIYU Holdings vs. Lululemon Athletica | BAIYU Holdings vs. Northstar Clean Technologies | BAIYU Holdings vs. Cedar Realty Trust |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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