Correlation Between EMX Royalty and Nouveau Monde
Can any of the company-specific risk be diversified away by investing in both EMX Royalty and Nouveau Monde 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 Nouveau Monde 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 Nouveau Monde Graphite, you can compare the effects of market volatilities on EMX Royalty and Nouveau Monde 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 Nouveau Monde. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMX Royalty and Nouveau Monde.
Diversification Opportunities for EMX Royalty and Nouveau Monde
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EMX and Nouveau is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding EMX Royalty Corp and Nouveau Monde Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nouveau Monde Graphite 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 Nouveau Monde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nouveau Monde Graphite has no effect on the direction of EMX Royalty i.e., EMX Royalty and Nouveau Monde go up and down completely randomly.
Pair Corralation between EMX Royalty and Nouveau Monde
Considering the 90-day investment horizon EMX Royalty Corp is expected to generate 0.53 times more return on investment than Nouveau Monde. However, EMX Royalty Corp is 1.88 times less risky than Nouveau Monde. It trades about 0.0 of its potential returns per unit of risk. Nouveau Monde Graphite is currently generating about -0.03 per unit of risk. If you would invest 199.00 in EMX Royalty Corp on November 2, 2024 and sell it today you would lose (23.00) from holding EMX Royalty Corp or give up 11.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMX Royalty Corp vs. Nouveau Monde Graphite
Performance |
| Timeline |
| EMX Royalty Corp |
| Nouveau Monde Graphite |
EMX Royalty and Nouveau Monde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMX Royalty and Nouveau Monde
The main advantage of trading using opposite EMX Royalty and Nouveau Monde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMX Royalty position performs unexpectedly, Nouveau Monde 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 Nouveau Monde will offset losses from the drop in Nouveau Monde'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 |
| Nouveau Monde vs. Mason Graphite | Nouveau Monde vs. Northern Graphite | Nouveau Monde vs. Graphite One | Nouveau Monde vs. Lomiko 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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