Correlation Between EMX Royalty and Northern Dynasty
Can any of the company-specific risk be diversified away by investing in both EMX Royalty and Northern Dynasty 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 EMX Royalty and Northern Dynasty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMX Royalty Corp and Northern Dynasty Minerals, you can compare the effects of market volatilities on EMX Royalty and Northern Dynasty 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 EMX Royalty with a short position of Northern Dynasty. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMX Royalty and Northern Dynasty.
Diversification Opportunities for EMX Royalty and Northern Dynasty
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EMX and Northern is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding EMX Royalty Corp and Northern Dynasty Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Dynasty Minerals and EMX Royalty 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 EMX Royalty Corp are associated (or correlated) with Northern Dynasty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Dynasty Minerals has no effect on the direction of EMX Royalty i.e., EMX Royalty and Northern Dynasty go up and down completely randomly.
Pair Corralation between EMX Royalty and Northern Dynasty
Considering the 90-day investment horizon EMX Royalty is expected to generate 10.98 times less return on investment than Northern Dynasty. But when comparing it to its historical volatility, EMX Royalty Corp is 3.53 times less risky than Northern Dynasty. It trades about 0.06 of its potential returns per unit of risk. Northern Dynasty Minerals is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Northern Dynasty Minerals on October 21, 2024 and sell it today you would earn a total of 11.00 from holding Northern Dynasty Minerals or generate 21.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMX Royalty Corp vs. Northern Dynasty Minerals
Performance |
| Timeline |
| EMX Royalty Corp |
| Northern Dynasty Minerals |
EMX Royalty and Northern Dynasty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMX Royalty and Northern Dynasty
The main advantage of trading using opposite EMX Royalty and Northern Dynasty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMX Royalty position performs unexpectedly, Northern Dynasty 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 Northern Dynasty will offset losses from the drop in Northern Dynasty's long position.| EMX Royalty vs. Metalla Royalty Streaming | EMX Royalty vs. Osisko Gold Ro | EMX Royalty vs. Equinox Gold Corp | EMX Royalty vs. SilverCrest Metals |
| Northern Dynasty vs. Vizsla Resources Corp | Northern Dynasty vs. Western Copper and | Northern Dynasty vs. Americas Silver Corp | Northern Dynasty vs. EMX Royalty Corp |
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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