Correlation Between Definity Financial and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Definity Financial 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 Definity Financial and NeXGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Definity Financial Corp and NeXGold Mining Corp, you can compare the effects of market volatilities on Definity Financial 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 Definity Financial with a short position of NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definity Financial and NeXGold Mining.
Diversification Opportunities for Definity Financial and NeXGold Mining
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Definity and NeXGold is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Definity Financial Corp 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 Definity Financial 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 Definity Financial Corp 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 Definity Financial i.e., Definity Financial and NeXGold Mining go up and down completely randomly.
Pair Corralation between Definity Financial and NeXGold Mining
Assuming the 90 days trading horizon Definity Financial Corp is expected to generate 0.42 times more return on investment than NeXGold Mining. However, Definity Financial Corp is 2.36 times less risky than NeXGold Mining. It trades about 0.28 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about -0.37 per unit of risk. If you would invest 5,443 in Definity Financial Corp on August 31, 2024 and sell it today you would earn a total of 423.00 from holding Definity Financial Corp or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Definity Financial Corp vs. NeXGold Mining Corp
Performance |
| Timeline |
| Definity Financial Corp |
| NeXGold Mining Corp |
Definity Financial and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Definity Financial and NeXGold Mining
The main advantage of trading using opposite Definity Financial and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Definity Financial 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.| Definity Financial vs. iShares Canadian HYBrid | Definity Financial vs. Brompton European Dividend | Definity Financial vs. Solar Alliance Energy | Definity Financial vs. PHN Multi Style All Cap |
| NeXGold Mining vs. Newmont Goldcorp Corp | NeXGold Mining vs. Agnico Eagle Mines | NeXGold Mining vs. Barrick Gold Corp | NeXGold Mining vs. Wheaton Precious Metals |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |