Correlation Between Gatos Silver and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Gatos Silver 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 Gatos Silver and NeXGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gatos Silver and NeXGold Mining Corp, you can compare the effects of market volatilities on Gatos Silver 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 Gatos Silver with a short position of NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and NeXGold Mining.
Diversification Opportunities for Gatos Silver and NeXGold Mining
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gatos and NeXGold is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver 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 Gatos Silver 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 Gatos Silver 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 Gatos Silver i.e., Gatos Silver and NeXGold Mining go up and down completely randomly.
Pair Corralation between Gatos Silver and NeXGold Mining
Assuming the 90 days trading horizon Gatos Silver is expected to generate 1.03 times more return on investment than NeXGold Mining. However, Gatos Silver is 1.03 times more volatile than NeXGold Mining Corp. It trades about 0.08 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about -0.05 per unit of risk. If you would invest 1,568 in Gatos Silver on September 3, 2024 and sell it today you would earn a total of 609.00 from holding Gatos Silver or generate 38.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gatos Silver vs. NeXGold Mining Corp
Performance |
| Timeline |
| Gatos Silver |
| NeXGold Mining Corp |
Gatos Silver and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gatos Silver and NeXGold Mining
The main advantage of trading using opposite Gatos Silver and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatos Silver 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.| Gatos Silver vs. Algoma Steel Group | Gatos Silver vs. Champion Iron | Gatos Silver vs. International Zeolite Corp | Gatos Silver vs. European Residential Real |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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