Correlation Between Northstar Clean and CBOE Volatility
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and CBOE Volatility 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 CBOE Volatility 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 CBOE Volatility Index, you can compare the effects of market volatilities on Northstar Clean and CBOE Volatility 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 CBOE Volatility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and CBOE Volatility.
Diversification Opportunities for Northstar Clean and CBOE Volatility
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northstar and CBOE is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and CBOE Volatility Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBOE Volatility Index 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 CBOE Volatility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBOE Volatility Index has no effect on the direction of Northstar Clean i.e., Northstar Clean and CBOE Volatility go up and down completely randomly.
Pair Corralation between Northstar Clean and CBOE Volatility
Assuming the 90 days horizon Northstar Clean Technologies is expected to generate 0.85 times more return on investment than CBOE Volatility. However, Northstar Clean Technologies is 1.18 times less risky than CBOE Volatility. It trades about 0.04 of its potential returns per unit of risk. CBOE Volatility Index is currently generating about 0.02 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 | Very Weak |
| Accuracy | 96.3% |
| Values | Daily Returns |
Northstar Clean Technologies vs. CBOE Volatility Index
Performance |
| Timeline |
Northstar Clean and CBOE Volatility Volatility Contrast
Predicted Return Density |
| Returns |
Northstar Clean Technologies
Pair trading matchups for Northstar Clean
CBOE Volatility Index
Pair trading matchups for CBOE Volatility
Pair Trading with Northstar Clean and CBOE Volatility
The main advantage of trading using opposite Northstar Clean and CBOE Volatility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, CBOE Volatility 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 CBOE Volatility will offset losses from the drop in CBOE Volatility'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 |
| CBOE Volatility vs. Nascent Wine | CBOE Volatility vs. Diageo PLC ADR | CBOE Volatility vs. Summit Materials | CBOE Volatility vs. Paiute Oil Mining |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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