Correlation Between Associated Capital and NXG NextGen
Can any of the company-specific risk be diversified away by investing in both Associated Capital and NXG NextGen 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 Associated Capital and NXG NextGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and NXG NextGen Infrastructure, you can compare the effects of market volatilities on Associated Capital and NXG NextGen 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 Associated Capital with a short position of NXG NextGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and NXG NextGen.
Diversification Opportunities for Associated Capital and NXG NextGen
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Associated and NXG is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr and Associated Capital 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 Associated Capital Group are associated (or correlated) with NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of Associated Capital i.e., Associated Capital and NXG NextGen go up and down completely randomly.
Pair Corralation between Associated Capital and NXG NextGen
Allowing for the 90-day total investment horizon Associated Capital Group is expected to under-perform the NXG NextGen. But the stock apears to be less risky and, when comparing its historical volatility, Associated Capital Group is 1.27 times less risky than NXG NextGen. The stock trades about 0.0 of its potential returns per unit of risk. The NXG NextGen Infrastructure is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,076 in NXG NextGen Infrastructure on August 27, 2024 and sell it today you would earn a total of 1,871 from holding NXG NextGen Infrastructure or generate 60.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. NXG NextGen Infrastructure
Performance |
| Timeline |
| Associated Capital |
| NXG NextGen Infrastr |
Associated Capital and NXG NextGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and NXG NextGen
The main advantage of trading using opposite Associated Capital and NXG NextGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, NXG NextGen 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 NXG NextGen will offset losses from the drop in NXG NextGen's long position.| Associated Capital vs. PowerUp Acquisition Corp | Associated Capital vs. Aurora Innovation | Associated Capital vs. HUMANA INC | Associated Capital vs. Aquagold International |
| NXG NextGen vs. PowerUp Acquisition Corp | NXG NextGen vs. Aurora Innovation | NXG NextGen vs. HUMANA INC | NXG NextGen vs. Aquagold International |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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