Correlation Between Japan Gold and Nighthawk Gold
Can any of the company-specific risk be diversified away by investing in both Japan Gold and Nighthawk Gold 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 Japan Gold and Nighthawk Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Gold Corp and Nighthawk Gold Corp, you can compare the effects of market volatilities on Japan Gold and Nighthawk Gold 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 Japan Gold with a short position of Nighthawk Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Gold and Nighthawk Gold.
Diversification Opportunities for Japan Gold and Nighthawk Gold
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Japan and Nighthawk is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Japan Gold Corp and Nighthawk Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nighthawk Gold Corp and Japan Gold 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 Japan Gold Corp are associated (or correlated) with Nighthawk Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nighthawk Gold Corp has no effect on the direction of Japan Gold i.e., Japan Gold and Nighthawk Gold go up and down completely randomly.
Pair Corralation between Japan Gold and Nighthawk Gold
If you would invest 6.00 in Japan Gold Corp on September 1, 2024 and sell it today you would lose (0.60) from holding Japan Gold Corp or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Japan Gold Corp vs. Nighthawk Gold Corp
Performance |
| Timeline |
| Japan Gold Corp |
| Nighthawk Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Japan Gold and Nighthawk Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Gold and Nighthawk Gold
The main advantage of trading using opposite Japan Gold and Nighthawk Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Gold position performs unexpectedly, Nighthawk Gold 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 Nighthawk Gold will offset losses from the drop in Nighthawk Gold's long position.| Japan Gold vs. Aurion Resources | Japan Gold vs. Rio2 Limited | Japan Gold vs. Palamina Corp | Japan Gold vs. BTU Metals Corp |
| Nighthawk Gold vs. Endurance Gold | Nighthawk Gold vs. Red Pine Exploration | Nighthawk Gold vs. Puma Exploration | Nighthawk Gold vs. White Gold 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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