Correlation Between Global Atomic and Nouveau Monde
Can any of the company-specific risk be diversified away by investing in both Global Atomic 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 Global Atomic and Nouveau Monde into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Atomic Corp and Nouveau Monde Graphite, you can compare the effects of market volatilities on Global Atomic 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 Global Atomic with a short position of Nouveau Monde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Atomic and Nouveau Monde.
Diversification Opportunities for Global Atomic and Nouveau Monde
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Nouveau is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Global Atomic 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 Global Atomic 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 Global Atomic 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 Global Atomic i.e., Global Atomic and Nouveau Monde go up and down completely randomly.
Pair Corralation between Global Atomic and Nouveau Monde
Assuming the 90 days horizon Global Atomic Corp is expected to generate 0.91 times more return on investment than Nouveau Monde. However, Global Atomic Corp is 1.1 times less risky than Nouveau Monde. It trades about -0.09 of its potential returns per unit of risk. Nouveau Monde Graphite is currently generating about -0.37 per unit of risk. If you would invest 81.00 in Global Atomic Corp on August 25, 2024 and sell it today you would lose (3.00) from holding Global Atomic Corp or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global Atomic Corp vs. Nouveau Monde Graphite
Performance |
| Timeline |
| Global Atomic Corp |
| Nouveau Monde Graphite |
Global Atomic and Nouveau Monde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Atomic and Nouveau Monde
The main advantage of trading using opposite Global Atomic and Nouveau Monde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Atomic 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.| Global Atomic vs. NGEx Minerals | Global Atomic vs. Boss Resources | Global Atomic vs. Forum Energy Metals | Global Atomic vs. Kraken Energy Corp |
| Nouveau Monde vs. Vale SA ADR | Nouveau Monde vs. Teck Resources Ltd | Nouveau Monde vs. MP Materials Corp | Nouveau Monde vs. BHP Group Limited |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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