Correlation Between Northstar Clean and Nike
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and Nike 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 Nike 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 Nike Inc, you can compare the effects of market volatilities on Northstar Clean and Nike 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 Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Nike.
Diversification Opportunities for Northstar Clean and Nike
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northstar and Nike is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc 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 Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of Northstar Clean i.e., Northstar Clean and Nike go up and down completely randomly.
Pair Corralation between Northstar Clean and Nike
Assuming the 90 days horizon Northstar Clean Technologies is expected to generate 2.58 times more return on investment than Nike. However, Northstar Clean is 2.58 times more volatile than Nike Inc. It trades about 0.14 of its potential returns per unit of risk. Nike Inc is currently generating about 0.02 per unit of risk. If you would invest 18.00 in Northstar Clean Technologies on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Northstar Clean Technologies or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Northstar Clean Technologies vs. Nike Inc
Performance |
| Timeline |
| Northstar Clean Tech |
| Nike Inc |
Northstar Clean and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and Nike
The main advantage of trading using opposite Northstar Clean and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, Nike 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 Nike will offset losses from the drop in Nike's long position.| Northstar Clean vs. Republic Services | Northstar Clean vs. Waste Connections | Northstar Clean vs. Clean Harbors | Northstar Clean vs. Gfl Environmental Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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