Correlation Between Northern Oil and AppHarvest
Can any of the company-specific risk be diversified away by investing in both Northern Oil and AppHarvest 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 Oil and AppHarvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Oil Gas and AppHarvest, you can compare the effects of market volatilities on Northern Oil and AppHarvest 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 Oil with a short position of AppHarvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Oil and AppHarvest.
Diversification Opportunities for Northern Oil and AppHarvest
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northern and AppHarvest is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Northern Oil Gas and AppHarvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppHarvest and Northern Oil 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 Oil Gas are associated (or correlated) with AppHarvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppHarvest has no effect on the direction of Northern Oil i.e., Northern Oil and AppHarvest go up and down completely randomly.
Pair Corralation between Northern Oil and AppHarvest
If you would invest 3,910 in Northern Oil Gas on January 25, 2024 and sell it today you would earn a total of 401.00 from holding Northern Oil Gas or generate 10.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 4.76% |
Values | Daily Returns |
Northern Oil Gas vs. AppHarvest
Performance |
Timeline |
Northern Oil Gas |
AppHarvest |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northern Oil and AppHarvest Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Northern Oil and AppHarvest
The main advantage of trading using opposite Northern Oil and AppHarvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Oil position performs unexpectedly, AppHarvest 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 AppHarvest will offset losses from the drop in AppHarvest's long position.Northern Oil vs. Vital Energy | Northern Oil vs. Comstock Resources | Northern Oil vs. Magnolia Oil Gas | Northern Oil vs. Obsidian Energy |
AppHarvest vs. Porch Group | AppHarvest vs. DermTech | AppHarvest vs. Hydrofarm Holdings GroupInc | AppHarvest vs. Danimer Scientific |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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