Correlation Between Northstar Clean and Steven Madden
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and Steven Madden 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 Steven Madden 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 Steven Madden, you can compare the effects of market volatilities on Northstar Clean and Steven Madden 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 Steven Madden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Steven Madden.
Diversification Opportunities for Northstar Clean and Steven Madden
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northstar and Steven is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden 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 Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of Northstar Clean i.e., Northstar Clean and Steven Madden go up and down completely randomly.
Pair Corralation between Northstar Clean and Steven Madden
Assuming the 90 days horizon Northstar Clean Technologies is expected to generate 3.17 times more return on investment than Steven Madden. However, Northstar Clean is 3.17 times more volatile than Steven Madden. It trades about 0.04 of its potential returns per unit of risk. Steven Madden is currently generating about 0.05 per unit of risk. If you would invest 14.00 in Northstar Clean Technologies on September 2, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northstar Clean Technologies vs. Steven Madden
Performance |
| Timeline |
| Northstar Clean Tech |
| Steven Madden |
Northstar Clean and Steven Madden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and Steven Madden
The main advantage of trading using opposite Northstar Clean and Steven Madden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, Steven Madden 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 Steven Madden will offset losses from the drop in Steven Madden'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 |
| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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