Correlation Between Alamos Gold and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Alamos Gold and NeXGold Mining 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 Alamos Gold and NeXGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alamos Gold and NeXGold Mining Corp, you can compare the effects of market volatilities on Alamos Gold and NeXGold Mining 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 Alamos Gold with a short position of NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alamos Gold and NeXGold Mining.
Diversification Opportunities for Alamos Gold and NeXGold Mining
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alamos and NeXGold is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Alamos Gold and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold Mining Corp and Alamos Gold 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 Alamos Gold are associated (or correlated) with NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of Alamos Gold i.e., Alamos Gold and NeXGold Mining go up and down completely randomly.
Pair Corralation between Alamos Gold and NeXGold Mining
Assuming the 90 days trading horizon Alamos Gold is expected to generate 0.46 times more return on investment than NeXGold Mining. However, Alamos Gold is 2.18 times less risky than NeXGold Mining. It trades about 0.13 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about 0.02 per unit of risk. If you would invest 1,845 in Alamos Gold on December 4, 2024 and sell it today you would earn a total of 1,500 from holding Alamos Gold or generate 81.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alamos Gold vs. NeXGold Mining Corp
Performance |
| Timeline |
| Alamos Gold |
| NeXGold Mining Corp |
Alamos Gold and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alamos Gold and NeXGold Mining
The main advantage of trading using opposite Alamos Gold and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alamos Gold position performs unexpectedly, NeXGold Mining 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 NeXGold Mining will offset losses from the drop in NeXGold Mining's long position.| Alamos Gold vs. Adex Mining | Alamos Gold vs. Eskay Mining Corp | Alamos Gold vs. Rogers Communications | Alamos Gold vs. Hemisphere Energy |
| NeXGold Mining vs. Titanium Transportation Group | NeXGold Mining vs. VIP Entertainment Technologies | NeXGold Mining vs. Thunderbird Entertainment Group | NeXGold Mining vs. Firan Technology Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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