Correlation Between Whitford Asset and Northern Lights

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

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

Diversification Opportunities for Whitford Asset and Northern Lights

0.0

Correlation Coefficient

Whitford Asset  Northern Lights

Pay attention - limited upside

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

Pair Corralation between Whitford Asset and Northern Lights

If you would invest (100.00) in Whitford Asset Management on September 30, 2024 and sell it today you would earn a total of  100.00  from holding Whitford Asset Management or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Whitford Asset Management  vs.  Northern Lights

Whitford Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Whitford Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Whitford Asset is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Northern Lights

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Whitford Asset and Northern Lights

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

The idea behind Whitford Asset Management and Northern Lights 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.