Correlation Between North Square and North Square

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

By analyzing existing cross correlation between North Square Investments and North Square Kennedy, you can compare the effects of market volatilities on North Square and North Square 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 North Square with a short position of North Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Square and North Square.

Diversification Opportunities for North Square and North Square

-0.73

Correlation Coefficient

North Square  North Square

Pay attention - limited upside

The 3 months correlation between North and North is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding North Square Investments and North Square Kennedy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Square Kennedy and North Square 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 North Square Investments are associated (or correlated) with North Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Square Kennedy has no effect on the direction of North Square i.e., North Square and North Square go up and down completely randomly.

Pair Corralation between North Square and North Square

Assuming the 90 days horizon North Square Investments is expected to under-perform the North Square. But the mutual fund apears to be less risky and, when comparing its historical volatility, North Square Investments is 1.95 times less risky than North Square. The mutual fund trades about -0.06 of its potential returns per unit of risk. The North Square Kennedy is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,122  in North Square Kennedy on September 13, 2024 and sell it today you would earn a total of  140.00  from holding North Square Kennedy or generate 12.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

North Square Investments  vs.  North Square Kennedy

North Square Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days North Square Investments has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, North Square is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

North Square Kennedy

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in North Square Kennedy are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, North Square may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with North Square and North Square

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

The idea behind North Square Investments and North Square Kennedy 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.