Correlation Between Northern Oil and Israel Acquisitions

Can any of the company-specific risk be diversified away by investing in both Northern Oil and Israel Acquisitions 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 Israel Acquisitions 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 Israel Acquisitions Corp, you can compare the effects of market volatilities on Northern Oil and Israel Acquisitions 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 Israel Acquisitions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Oil and Israel Acquisitions.

Diversification Opportunities for Northern Oil and Israel Acquisitions

0.58

Correlation Coefficient

Northern Oil  Israel Acquisitions

Very weak diversification

The 3 months correlation between Northern and Israel is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Northern Oil Gas and Israel Acquisitions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Acquisitions Corp 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 Israel Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Acquisitions Corp has no effect on the direction of Northern Oil i.e., Northern Oil and Israel Acquisitions go up and down completely randomly.

Pair Corralation between Northern Oil and Israel Acquisitions

Considering the 90-day investment horizon Northern Oil Gas is expected to under-perform the Israel Acquisitions. In addition to that, Northern Oil is 1.72 times more volatile than Israel Acquisitions Corp. It trades about -0.05 of its total potential returns per unit of risk. Israel Acquisitions Corp is currently generating about 0.0 per unit of volatility. If you would invest  1,255  in Israel Acquisitions Corp on August 3, 2025 and sell it today you would lose (7.00) from holding Israel Acquisitions Corp or give up 0.56% of portfolio value over 90 days.

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

Northern Oil Gas  vs.  Israel Acquisitions Corp

Northern Oil Gas

Risk-Adjusted Performance

Weakest

Over the last 90 days Northern Oil Gas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Israel Acquisitions Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Israel Acquisitions Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Israel Acquisitions is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Northern Oil and Israel Acquisitions

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

The idea behind Northern Oil Gas and Israel Acquisitions Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.