Correlation Between Northern Lights and Issachar Fund

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

By analyzing existing cross correlation between Northern Lights and Issachar Fund Issachar, you can compare the effects of market volatilities on Northern Lights and Issachar Fund 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 Northern Lights with a short position of Issachar Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and Issachar Fund.

Diversification Opportunities for Northern Lights and Issachar Fund

0.62

Correlation Coefficient

Northern Lights  Issachar Fund

Poor diversification

The 3 months correlation between Northern and Issachar is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and Issachar Fund Issachar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Issachar Fund Issachar and Northern Lights 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 Northern Lights are associated (or correlated) with Issachar Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Issachar Fund Issachar has no effect on the direction of Northern Lights i.e., Northern Lights and Issachar Fund go up and down completely randomly.

Pair Corralation between Northern Lights and Issachar Fund

Given the investment horizon of 90 days Northern Lights is expected to generate 1.31 times more return on investment than Issachar Fund. However, Northern Lights is 1.31 times more volatile than Issachar Fund Issachar. It trades about 0.05 of its potential returns per unit of risk. Issachar Fund Issachar is currently generating about 0.0 per unit of risk. If you would invest  3,227  in Northern Lights on September 29, 2024 and sell it today you would earn a total of  702.00  from holding Northern Lights or generate 21.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Northern Lights  vs.  Issachar Fund Issachar

Northern Lights

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Northern Lights has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Northern Lights is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Issachar Fund Issachar

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Issachar Fund Issachar are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Issachar Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Northern Lights and Issachar Fund

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

The idea behind Northern Lights and Issachar Fund Issachar 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.