Correlation Between Northern Lights and MORE
Can any of the company-specific risk be diversified away by investing in both Northern Lights and MORE 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 Northern Lights and MORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and MORE, you can compare the effects of market volatilities on Northern Lights and MORE 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 Northern Lights with a short position of MORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and MORE.
Diversification Opportunities for Northern Lights and MORE
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northern and MORE is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and MORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MORE and Northern Lights 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 Northern Lights are associated (or correlated) with MORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MORE has no effect on the direction of Northern Lights i.e., Northern Lights and MORE go up and down completely randomly.
Pair Corralation between Northern Lights and MORE
If you would invest 2,233 in MORE on January 24, 2024 and sell it today you would earn a total of 0.00 from holding MORE or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 4.76% |
Values | Daily Returns |
Northern Lights vs. MORE
Performance |
Timeline |
Northern Lights |
MORE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northern Lights and MORE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Northern Lights and MORE
The main advantage of trading using opposite Northern Lights and MORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights position performs unexpectedly, MORE 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 MORE will offset losses from the drop in MORE's long position.Northern Lights vs. Northern Lights | Northern Lights vs. Northern Lights | Northern Lights vs. ETF Series Solutions | Northern Lights vs. Mairs Power Minnesota |
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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