Correlation Between Northern Star and Duketon Mining

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

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

Diversification Opportunities for Northern Star and Duketon Mining

0.0

Correlation Coefficient

Northern Star  Duketon Mining

Pay attention - limited upside

The 3 months correlation between Northern and Duketon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northern Star Resources and Duketon Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duketon Mining and Northern Star 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 Star Resources are associated (or correlated) with Duketon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duketon Mining has no effect on the direction of Northern Star i.e., Northern Star and Duketon Mining go up and down completely randomly.

Pair Corralation between Northern Star and Duketon Mining

Assuming the 90 days trading horizon Northern Star Resources is expected to under-perform the Duketon Mining. But the stock apears to be less risky and, when comparing its historical volatility, Northern Star Resources is 1.49 times less risky than Duketon Mining. The stock trades about -0.36 of its potential returns per unit of risk. The Duketon Mining is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Duketon Mining on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Duketon Mining or generate 0.0% return on investment over 90 days.

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

Northern Star Resources  vs.  Duketon Mining

Northern Star Resources

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Northern Star Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Northern Star is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Duketon Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duketon Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Northern Star and Duketon Mining

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

The idea behind Northern Star Resources and Duketon Mining 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.