Correlation Between Northstar Clean and Schnitzer Steel
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and Schnitzer Steel 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 Schnitzer Steel 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 Schnitzer Steel Industries, you can compare the effects of market volatilities on Northstar Clean and Schnitzer Steel 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 Schnitzer Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Schnitzer Steel.
Diversification Opportunities for Northstar Clean and Schnitzer Steel
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northstar and Schnitzer is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Schnitzer Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schnitzer Steel Indu 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 Schnitzer Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schnitzer Steel Indu has no effect on the direction of Northstar Clean i.e., Northstar Clean and Schnitzer Steel go up and down completely randomly.
Pair Corralation between Northstar Clean and Schnitzer Steel
Assuming the 90 days horizon Northstar Clean is expected to generate 1.5 times less return on investment than Schnitzer Steel. In addition to that, Northstar Clean is 1.17 times more volatile than Schnitzer Steel Industries. It trades about 0.04 of its total potential returns per unit of risk. Schnitzer Steel Industries is currently generating about 0.07 per unit of volatility. If you would invest 1,558 in Schnitzer Steel Industries on September 5, 2024 and sell it today you would earn a total of 425.00 from holding Schnitzer Steel Industries or generate 27.28% 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. Schnitzer Steel Industries
Performance |
| Timeline |
| Northstar Clean Tech |
| Schnitzer Steel Indu |
Northstar Clean and Schnitzer Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and Schnitzer Steel
The main advantage of trading using opposite Northstar Clean and Schnitzer Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, Schnitzer Steel 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 Schnitzer Steel will offset losses from the drop in Schnitzer Steel's long position.| Northstar Clean vs. Republic Services | Northstar Clean vs. Waste Connections | Northstar Clean vs. Clean Harbors | Northstar Clean vs. Gfl Environmental Holdings |
| Schnitzer Steel vs. NETGEAR | Schnitzer Steel vs. MI Homes | Schnitzer Steel vs. Northstar Clean Technologies | Schnitzer Steel vs. Boston Properties |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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