Correlation Between Amer Sports, and NORTHERN

Can any of the company-specific risk be diversified away by investing in both Amer Sports, and NORTHERN 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 Amer Sports, and NORTHERN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amer Sports, and NORTHERN TRUST PORATION, you can compare the effects of market volatilities on Amer Sports, and NORTHERN 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 Amer Sports, with a short position of NORTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and NORTHERN.

Diversification Opportunities for Amer Sports, and NORTHERN

-0.63

Correlation Coefficient

Amer Sports,  NORTHERN

Excellent diversification

The 3 months correlation between Amer and NORTHERN is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and NORTHERN TRUST PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHERN TRUST PORATION and Amer Sports, 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 Amer Sports, are associated (or correlated) with NORTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHERN TRUST PORATION has no effect on the direction of Amer Sports, i.e., Amer Sports, and NORTHERN go up and down completely randomly.

Pair Corralation between Amer Sports, and NORTHERN

Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 5.91 times more return on investment than NORTHERN. However, Amer Sports, is 5.91 times more volatile than NORTHERN TRUST PORATION. It trades about 0.12 of its potential returns per unit of risk. NORTHERN TRUST PORATION is currently generating about -0.01 per unit of risk. If you would invest  1,340  in Amer Sports, on September 29, 2024 and sell it today you would earn a total of  1,502  from holding Amer Sports, or generate 112.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	48.41%
Values	Daily Returns

Amer Sports,  vs.  NORTHERN TRUST PORATION

Amer Sports,

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

NORTHERN TRUST PORATION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NORTHERN TRUST PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NORTHERN TRUST PORATION investors.

Pair Trading with Amer Sports, and NORTHERN

The main advantage of trading using opposite Amer Sports, and NORTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, position performs unexpectedly, NORTHERN 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 NORTHERN will offset losses from the drop in NORTHERN's long position.

The idea behind Amer Sports, and NORTHERN TRUST PORATION pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.