Correlation Between Cartesian Growth and Northern Star

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

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

Diversification Opportunities for Cartesian Growth and Northern Star

-0.41

Correlation Coefficient

Cartesian Growth  Northern Star

Very good diversification

The 3 months correlation between Cartesian and Northern is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cartesian Growth and Northern Star Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Star Investment and Cartesian Growth 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 Cartesian Growth are associated (or correlated) with Northern Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Star Investment has no effect on the direction of Cartesian Growth i.e., Cartesian Growth and Northern Star go up and down completely randomly.

Pair Corralation between Cartesian Growth and Northern Star

If you would invest  1,032  in Northern Star Investment on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Northern Star Investment or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.53%
Values	Daily Returns

Cartesian Growth  vs.  Northern Star Investment

Cartesian Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cartesian Growth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Northern Star Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Northern Star Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Northern Star is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cartesian Growth and Northern Star

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

The idea behind Cartesian Growth and Northern Star Investment 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.