Correlation Between Winsome Resources and Northern Star
Can any of the company-specific risk be diversified away by investing in both Winsome Resources 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 Winsome Resources and Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winsome Resources and Northern Star Resources, you can compare the effects of market volatilities on Winsome Resources 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 Winsome Resources with a short position of Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winsome Resources and Northern Star.
Diversification Opportunities for Winsome Resources and Northern Star
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Winsome and Northern is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Winsome Resources and Northern Star Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Star Resources and Winsome Resources 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 Winsome Resources 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 Resources has no effect on the direction of Winsome Resources i.e., Winsome Resources and Northern Star go up and down completely randomly.
Pair Corralation between Winsome Resources and Northern Star
Assuming the 90 days trading horizon Winsome Resources is expected to under-perform the Northern Star. In addition to that, Winsome Resources is 2.6 times more volatile than Northern Star Resources. It trades about -0.16 of its total potential returns per unit of risk. Northern Star Resources is currently generating about 0.19 per unit of volatility. If you would invest 1,534 in Northern Star Resources on December 30, 2024 and sell it today you would earn a total of 329.00 from holding Northern Star Resources or generate 21.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Winsome Resources vs. Northern Star Resources
Performance |
Timeline |
Winsome Resources |
Northern Star Resources |
Winsome Resources and Northern Star Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Winsome Resources and Northern Star
The main advantage of trading using opposite Winsome Resources and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winsome Resources 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.Winsome Resources vs. K2 Asset Management | Winsome Resources vs. Regis Healthcare | Winsome Resources vs. Rimfire Pacific Mining | Winsome Resources vs. Catalyst Metals |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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