Correlation Between Northern Lights and Salient Mlp

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

By analyzing existing cross correlation between Northern Lights and Salient Mlp Energy, you can compare the effects of market volatilities on Northern Lights and Salient Mlp 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 Salient Mlp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and Salient Mlp.

Diversification Opportunities for Northern Lights and Salient Mlp

0.67

Correlation Coefficient

Northern Lights  Salient Mlp

Poor diversification

The 3 months correlation between Northern and Salient is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and Salient Mlp Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Mlp Energy 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 Salient Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Mlp Energy has no effect on the direction of Northern Lights i.e., Northern Lights and Salient Mlp go up and down completely randomly.

Pair Corralation between Northern Lights and Salient Mlp

Assuming the 90 days horizon Northern Lights is expected to generate 0.83 times more return on investment than Salient Mlp. However, Northern Lights is 1.2 times less risky than Salient Mlp. It trades about 0.21 of its potential returns per unit of risk. Salient Mlp Energy is currently generating about 0.11 per unit of risk. If you would invest  876.00  in Northern Lights on May 5, 2025 and sell it today you would earn a total of  91.00  from holding Northern Lights or generate 10.39% return on investment over 90 days.

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

Northern Lights  vs.  Salient Mlp Energy

Northern Lights

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Northern Lights are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Northern Lights may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Salient Mlp Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Salient Mlp Energy are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Salient Mlp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Northern Lights and Salient Mlp

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

The idea behind Northern Lights and Salient Mlp Energy 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.