Correlation Between North Peak and First Mining
Can any of the company-specific risk be diversified away by investing in both North Peak and First 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 North Peak and First Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Peak Resources and First Mining Gold, you can compare the effects of market volatilities on North Peak and First 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 North Peak with a short position of First Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Peak and First Mining.
Diversification Opportunities for North Peak and First Mining
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between North and First is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding North Peak Resources and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold and North Peak 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 North Peak Resources are associated (or correlated) with First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of North Peak i.e., North Peak and First Mining go up and down completely randomly.
Pair Corralation between North Peak and First Mining
Assuming the 90 days horizon North Peak Resources is expected to generate 1.32 times more return on investment than First Mining. However, North Peak is 1.32 times more volatile than First Mining Gold. It trades about 0.03 of its potential returns per unit of risk. First Mining Gold is currently generating about 0.0 per unit of risk. If you would invest 55.00 in North Peak Resources on August 27, 2024 and sell it today you would lose (6.00) from holding North Peak Resources or give up 10.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Peak Resources vs. First Mining Gold
Performance |
| Timeline |
| North Peak Resources |
| First Mining Gold |
North Peak and First Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Peak and First Mining
The main advantage of trading using opposite North Peak and First Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Peak position performs unexpectedly, First 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 First Mining will offset losses from the drop in First Mining's long position.| North Peak vs. Boxlight Corp Class | North Peak vs. Siyata Mobile | North Peak vs. ClearOne | North Peak vs. HUMANA INC |
| First Mining vs. Aurion Resources | First Mining vs. Orezone Gold Corp | First Mining vs. Rio2 Limited | First Mining vs. Norsemont Mining |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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