Correlation Between Northstar Clean and Cool
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and Cool 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 Cool 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 Cool Company, you can compare the effects of market volatilities on Northstar Clean and Cool 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 Cool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Cool.
Diversification Opportunities for Northstar Clean and Cool
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northstar and Cool is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Cool Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company 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 Cool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company has no effect on the direction of Northstar Clean i.e., Northstar Clean and Cool go up and down completely randomly.
Pair Corralation between Northstar Clean and Cool
Assuming the 90 days horizon Northstar Clean Technologies is expected to generate 2.56 times more return on investment than Cool. However, Northstar Clean is 2.56 times more volatile than Cool Company. It trades about 0.04 of its potential returns per unit of risk. Cool Company is currently generating about -0.01 per unit of risk. If you would invest 14.00 in Northstar Clean Technologies on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Northstar Clean Technologies or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.07% |
| Values | Daily Returns |
Northstar Clean Technologies vs. Cool Company
Performance |
| Timeline |
| Northstar Clean Tech |
| Cool Company |
Northstar Clean and Cool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and Cool
The main advantage of trading using opposite Northstar Clean and Cool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, Cool 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 Cool will offset losses from the drop in Cool'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 |
| Cool vs. Northstar Clean Technologies | Cool vs. CVW CleanTech | Cool vs. Braskem SA Class | Cool vs. Luxfer Holdings PLC |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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