Correlation Between Northstar Clean and CI Financial
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and CI Financial 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 Northstar Clean and CI Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northstar Clean Technologies and CI Financial Corp, you can compare the effects of market volatilities on Northstar Clean and CI Financial 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 Northstar Clean with a short position of CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and CI Financial.
Diversification Opportunities for Northstar Clean and CI Financial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Northstar and CIX is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp and Northstar Clean 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 Northstar Clean Technologies are associated (or correlated) with CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Northstar Clean i.e., Northstar Clean and CI Financial go up and down completely randomly.
Pair Corralation between Northstar Clean and CI Financial
Assuming the 90 days trading horizon Northstar Clean Technologies is expected to generate 1.05 times more return on investment than CI Financial. However, Northstar Clean is 1.05 times more volatile than CI Financial Corp. It trades about 0.24 of its potential returns per unit of risk. CI Financial Corp is currently generating about 0.24 per unit of risk. If you would invest 20.00 in Northstar Clean Technologies on September 25, 2024 and sell it today you would earn a total of 15.00 from holding Northstar Clean Technologies or generate 75.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Northstar Clean Technologies vs. CI Financial Corp
Performance |
Timeline |
Northstar Clean Tech |
CI Financial Corp |
Northstar Clean and CI Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Northstar Clean and CI Financial
The main advantage of trading using opposite Northstar Clean and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, CI Financial 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 CI Financial will offset losses from the drop in CI Financial's long position.Northstar Clean vs. CHAR Technologies | Northstar Clean vs. iShares Canadian HYBrid | Northstar Clean vs. Altagas Cum Red | Northstar Clean vs. European Residential Real |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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