Correlation Between Northern Technologies and Alto Ingredients
Can any of the company-specific risk be diversified away by investing in both Northern Technologies and Alto Ingredients 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 Technologies and Alto Ingredients into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Technologies and Alto Ingredients, you can compare the effects of market volatilities on Northern Technologies and Alto Ingredients 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 Technologies with a short position of Alto Ingredients. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Technologies and Alto Ingredients.
Diversification Opportunities for Northern Technologies and Alto Ingredients
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Northern and Alto is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Northern Technologies and Alto Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alto Ingredients and Northern Technologies 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 Technologies are associated (or correlated) with Alto Ingredients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alto Ingredients has no effect on the direction of Northern Technologies i.e., Northern Technologies and Alto Ingredients go up and down completely randomly.
Pair Corralation between Northern Technologies and Alto Ingredients
Given the investment horizon of 90 days Northern Technologies is expected to under-perform the Alto Ingredients. But the stock apears to be less risky and, when comparing its historical volatility, Northern Technologies is 2.52 times less risky than Alto Ingredients. The stock trades about -0.05 of its potential returns per unit of risk. The Alto Ingredients is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 109.00 in Alto Ingredients on August 25, 2025 and sell it today you would earn a total of 101.00 from holding Alto Ingredients or generate 92.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Technologies vs. Alto Ingredients
Performance |
| Timeline |
| Northern Technologies |
| Alto Ingredients |
Northern Technologies and Alto Ingredients Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Technologies and Alto Ingredients
The main advantage of trading using opposite Northern Technologies and Alto Ingredients positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Technologies position performs unexpectedly, Alto Ingredients 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 Alto Ingredients will offset losses from the drop in Alto Ingredients' long position.| Northern Technologies vs. Loop Industries | Northern Technologies vs. Alto Ingredients | Northern Technologies vs. Trinseo SA | Northern Technologies vs. Largo Resources |
| Alto Ingredients vs. Origin Materials | Alto Ingredients vs. Loop Industries | Alto Ingredients vs. NexMetals Mining Corp | Alto Ingredients vs. Northern Technologies |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |