Correlation Between NXG NextGen and Alerus Financial
Can any of the company-specific risk be diversified away by investing in both NXG NextGen and Alerus Financial 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 NXG NextGen and Alerus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NXG NextGen Infrastructure and Alerus Financial Corp, you can compare the effects of market volatilities on NXG NextGen and Alerus Financial 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 NXG NextGen with a short position of Alerus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXG NextGen and Alerus Financial.
Diversification Opportunities for NXG NextGen and Alerus Financial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between NXG and Alerus is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding NXG NextGen Infrastructure and Alerus Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alerus Financial Corp and NXG NextGen 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 NXG NextGen Infrastructure are associated (or correlated) with Alerus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alerus Financial Corp has no effect on the direction of NXG NextGen i.e., NXG NextGen and Alerus Financial go up and down completely randomly.
Pair Corralation between NXG NextGen and Alerus Financial
Considering the 90-day investment horizon NXG NextGen Infrastructure is expected to generate 1.0 times more return on investment than Alerus Financial. However, NXG NextGen is 1.0 times more volatile than Alerus Financial Corp. It trades about 0.05 of its potential returns per unit of risk. Alerus Financial Corp is currently generating about 0.01 per unit of risk. If you would invest 2,781 in NXG NextGen Infrastructure on September 23, 2024 and sell it today you would earn a total of 1,436 from holding NXG NextGen Infrastructure or generate 51.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NXG NextGen Infrastructure vs. Alerus Financial Corp
Performance |
Timeline |
NXG NextGen Infrastr |
Alerus Financial Corp |
NXG NextGen and Alerus Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NXG NextGen and Alerus Financial
The main advantage of trading using opposite NXG NextGen and Alerus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NXG NextGen position performs unexpectedly, Alerus Financial 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 Alerus Financial will offset losses from the drop in Alerus Financial's long position.NXG NextGen vs. MFS Investment Grade | NXG NextGen vs. Eaton Vance National | NXG NextGen vs. Nuveen California Select | NXG NextGen vs. Federated Premier Municipal |
Alerus Financial vs. Federated Premier Municipal | Alerus Financial vs. Blackrock Muniyield | Alerus Financial vs. Diamond Hill Investment | Alerus Financial vs. NXG NextGen Infrastructure |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Global Correlations Find global opportunities by holding instruments from different markets |