Correlation Between Northstar Clean and Shui On

Can any of the company-specific risk be diversified away by investing in both Northstar Clean and Shui On 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 Northstar Clean and Shui On into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Northstar Clean Technologies and Shui On Land, you can compare the effects of market volatilities on Northstar Clean and Shui On 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 Northstar Clean with a short position of Shui On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Shui On.

Diversification Opportunities for Northstar Clean and Shui On

0.18

Correlation Coefficient

Northstar Clean  Shui On

Average diversification

The 3 months correlation between Northstar and Shui is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Shui On Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shui On Land and Northstar Clean 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 Northstar Clean Technologies are associated (or correlated) with Shui On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shui On Land has no effect on the direction of Northstar Clean i.e., Northstar Clean and Shui On go up and down completely randomly.

Pair Corralation between Northstar Clean and Shui On

If you would invest  20.00  in Northstar Clean Technologies on October 7, 2024 and sell it today you would earn a total of  9.00  from holding Northstar Clean Technologies or generate 45.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	2.44%
Values	Daily Returns

Northstar Clean Technologies  vs.  Shui On Land

Northstar Clean Tech

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Northstar Clean Technologies are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Northstar Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Shui On Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shui On Land has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Shui On is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Northstar Clean and Shui On

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

The idea behind Northstar Clean Technologies and Shui On Land 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.