Correlation Between Flinders Resources and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Flinders Resources 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 Flinders Resources and NeXGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flinders Resources Limited and NeXGold Mining Corp, you can compare the effects of market volatilities on Flinders Resources 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 Flinders Resources with a short position of NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flinders Resources and NeXGold Mining.
Diversification Opportunities for Flinders Resources and NeXGold Mining
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flinders and NeXGold is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited 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 Flinders Resources 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 Flinders Resources Limited 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 Flinders Resources i.e., Flinders Resources and NeXGold Mining go up and down completely randomly.
Pair Corralation between Flinders Resources and NeXGold Mining
Assuming the 90 days horizon Flinders Resources Limited is expected to generate 1.56 times more return on investment than NeXGold Mining. However, Flinders Resources is 1.56 times more volatile than NeXGold Mining Corp. It trades about 0.2 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about 0.07 per unit of risk. If you would invest 498.00 in Flinders Resources Limited on October 12, 2024 and sell it today you would earn a total of 77.00 from holding Flinders Resources Limited or generate 15.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Flinders Resources Limited vs. NeXGold Mining Corp
Performance |
| Timeline |
| Flinders Resources |
| NeXGold Mining Corp |
Flinders Resources and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flinders Resources and NeXGold Mining
The main advantage of trading using opposite Flinders Resources and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flinders Resources 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.| Flinders Resources vs. NeXGold Mining Corp | Flinders Resources vs. Millennium Silver Corp | Flinders Resources vs. Labrador Iron Ore | Flinders Resources vs. Arizona Gold Silver |
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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.
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