Correlation Between Ninepoint High and Brompton Global

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

By analyzing existing cross correlation between Ninepoint High Interest and Brompton Global Dividend, you can compare the effects of market volatilities on Ninepoint High and Brompton Global 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 Ninepoint High with a short position of Brompton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ninepoint High and Brompton Global.

Diversification Opportunities for Ninepoint High and Brompton Global

-0.23

Correlation Coefficient

Ninepoint High  Brompton Global

Very good diversification

The 3 months correlation between Ninepoint and Brompton is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ninepoint High Interest and Brompton Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Global Dividend and Ninepoint High 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 Ninepoint High Interest are associated (or correlated) with Brompton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Global Dividend has no effect on the direction of Ninepoint High i.e., Ninepoint High and Brompton Global go up and down completely randomly.

Pair Corralation between Ninepoint High and Brompton Global

Assuming the 90 days trading horizon Ninepoint High Interest is expected to under-perform the Brompton Global. But the etf apears to be less risky and, when comparing its historical volatility, Ninepoint High Interest is 13.51 times less risky than Brompton Global. The etf trades about -0.01 of its potential returns per unit of risk. The Brompton Global Dividend is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,219  in Brompton Global Dividend on December 1, 2024 and sell it today you would earn a total of  73.00  from holding Brompton Global Dividend or generate 3.29% return on investment over 90 days.

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

Ninepoint High Interest  vs.  Brompton Global Dividend

Ninepoint High Interest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ninepoint High Interest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Ninepoint High is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Brompton Global Dividend

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brompton Global Dividend are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Brompton Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ninepoint High and Brompton Global

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

The idea behind Ninepoint High Interest and Brompton Global Dividend 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.