Correlation Between Northstar Clean and Richelieu Hardware

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

Diversification Opportunities for Northstar Clean and Richelieu Hardware

-0.2

Correlation Coefficient

Northstar Clean  Richelieu Hardware

Good diversification

The 3 months correlation between Northstar and Richelieu is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Richelieu Hardware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richelieu Hardware 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 Richelieu Hardware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richelieu Hardware has no effect on the direction of Northstar Clean i.e., Northstar Clean and Richelieu Hardware go up and down completely randomly.

Pair Corralation between Northstar Clean and Richelieu Hardware

Assuming the 90 days trading horizon Northstar Clean Technologies is expected to under-perform the Richelieu Hardware. In addition to that, Northstar Clean is 2.36 times more volatile than Richelieu Hardware. It trades about -0.03 of its total potential returns per unit of risk. Richelieu Hardware is currently generating about 0.07 per unit of volatility. If you would invest  3,322  in Richelieu Hardware on May 7, 2025 and sell it today you would earn a total of  196.00  from holding Richelieu Hardware or generate 5.9% return on investment over 90 days.

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

Northstar Clean Technologies  vs.  Richelieu Hardware

Northstar Clean Tech

Risk-Adjusted Performance

Weakest

Over the last 90 days Northstar Clean Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Richelieu Hardware

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Richelieu Hardware are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Richelieu Hardware may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Northstar Clean and Richelieu Hardware

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

The idea behind Northstar Clean Technologies and Richelieu Hardware 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.