Correlation Between BLACK and Northstar Clean

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

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

Diversification Opportunities for BLACK and Northstar Clean

-0.12

Correlation Coefficient

BLACK  Northstar Clean

Good diversification

The 3 months correlation between BLACK and Northstar is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BLACK HILLS P and Northstar Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northstar Clean Tech and BLACK 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 BLACK HILLS P are associated (or correlated) with Northstar Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northstar Clean Tech has no effect on the direction of BLACK i.e., BLACK and Northstar Clean go up and down completely randomly.

Pair Corralation between BLACK and Northstar Clean

If you would invest  28.00  in Northstar Clean Technologies on December 25, 2024 and sell it today you would lose (1.00) from holding Northstar Clean Technologies or give up 3.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	83.05%
Values	Daily Returns

BLACK HILLS P  vs.  Northstar Clean Technologies

BLACK HILLS P

Risk-Adjusted Performance

Very Weak

Over the last 90 days BLACK HILLS P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BLACK is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Northstar Clean Tech

Risk-Adjusted Performance

Very Weak

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

Pair Trading with BLACK and Northstar Clean

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

The idea behind BLACK HILLS P and Northstar Clean Technologies 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.