Correlation Between GoldMining and NB Private
Can any of the company-specific risk be diversified away by investing in both GoldMining and NB Private 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 GoldMining and NB Private into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and NB Private Equity, you can compare the effects of market volatilities on GoldMining and NB Private 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 GoldMining with a short position of NB Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and NB Private.
Diversification Opportunities for GoldMining and NB Private
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GoldMining and NBPE is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and NB Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NB Private Equity and GoldMining 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 GoldMining are associated (or correlated) with NB Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NB Private Equity has no effect on the direction of GoldMining i.e., GoldMining and NB Private go up and down completely randomly.
Pair Corralation between GoldMining and NB Private
Assuming the 90 days trading horizon GoldMining is expected to under-perform the NB Private. In addition to that, GoldMining is 2.19 times more volatile than NB Private Equity. It trades about -0.11 of its total potential returns per unit of risk. NB Private Equity is currently generating about 0.08 per unit of volatility. If you would invest 158,000 in NB Private Equity on September 13, 2024 and sell it today you would earn a total of 3,000 from holding NB Private Equity or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.87% |
| Values | Daily Returns |
GoldMining vs. NB Private Equity
Performance |
| Timeline |
| GoldMining |
| NB Private Equity |
GoldMining and NB Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and NB Private
The main advantage of trading using opposite GoldMining and NB Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, NB Private 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 NB Private will offset losses from the drop in NB Private's long position.| GoldMining vs. Wizz Air Holdings | GoldMining vs. Porvair plc | GoldMining vs. Systemair AB | GoldMining vs. Sealed Air Corp |
| NB Private vs. Sealed Air Corp | NB Private vs. Cincinnati Financial Corp | NB Private vs. Erste Group Bank | NB Private vs. Systemair AB |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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