Correlation Between Xtract One and Northstar Clean
Can any of the company-specific risk be diversified away by investing in both Xtract One and Northstar Clean 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 Xtract One and Northstar Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtract One Technologies and Northstar Clean Technologies, you can compare the effects of market volatilities on Xtract One and Northstar Clean 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 Xtract One with a short position of Northstar Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Northstar Clean.
Diversification Opportunities for Xtract One and Northstar Clean
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtract and Northstar is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Northstar Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northstar Clean Tech and Xtract One 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 Xtract One Technologies are associated (or correlated) with Northstar Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northstar Clean Tech has no effect on the direction of Xtract One i.e., Xtract One and Northstar Clean go up and down completely randomly.
Pair Corralation between Xtract One and Northstar Clean
Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Northstar Clean. But the stock apears to be less risky and, when comparing its historical volatility, Xtract One Technologies is 1.6 times less risky than Northstar Clean. The stock trades about -0.04 of its potential returns per unit of risk. The Northstar Clean Technologies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Northstar Clean Technologies on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Northstar Clean Technologies or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtract One Technologies vs. Northstar Clean Technologies
Performance |
| Timeline |
| Xtract One Technologies |
| Northstar Clean Tech |
Xtract One and Northstar Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtract One and Northstar Clean
The main advantage of trading using opposite Xtract One and Northstar Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtract One position performs unexpectedly, Northstar Clean 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 Northstar Clean will offset losses from the drop in Northstar Clean's long position.| Xtract One vs. UnitedHealth Group CDR | Xtract One vs. NorthWest Healthcare Properties | Xtract One vs. HPQ Silicon Resources | Xtract One vs. Rubicon Organics |
| Northstar Clean vs. Cielo Waste Solutions | Northstar Clean vs. CHAR Technologies | Northstar Clean vs. iShares Canadian HYBrid | Northstar Clean vs. Altagas Cum Red |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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