Correlation Between Great Northern and Auctus Alternative

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

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

Diversification Opportunities for Great Northern and Auctus Alternative

0.56

Correlation Coefficient

Great Northern  Auctus Alternative

Very weak diversification

The 3 months correlation between Great and Auctus is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Great Northern Minerals and Auctus Alternative Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auctus Alternative and Great Northern 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 Great Northern Minerals are associated (or correlated) with Auctus Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auctus Alternative has no effect on the direction of Great Northern i.e., Great Northern and Auctus Alternative go up and down completely randomly.

Pair Corralation between Great Northern and Auctus Alternative

Assuming the 90 days trading horizon Great Northern is expected to generate 1.04 times less return on investment than Auctus Alternative. In addition to that, Great Northern is 2.54 times more volatile than Auctus Alternative Investments. It trades about 0.04 of its total potential returns per unit of risk. Auctus Alternative Investments is currently generating about 0.1 per unit of volatility. If you would invest  51.00  in Auctus Alternative Investments on December 21, 2024 and sell it today you would earn a total of  9.00  from holding Auctus Alternative Investments or generate 17.65% return on investment over 90 days.

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

Great Northern Minerals  vs.  Auctus Alternative Investments

Great Northern Minerals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Great Northern Minerals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Great Northern unveiled solid returns over the last few months and may actually be approaching a breakup point.

Auctus Alternative

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Auctus Alternative Investments are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Auctus Alternative unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Great Northern and Auctus Alternative

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

The idea behind Great Northern Minerals and Auctus Alternative Investments 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.