Correlation Between Jervois Mining and Nexa Resources
Can any of the company-specific risk be diversified away by investing in both Jervois Mining and Nexa Resources 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 Jervois Mining and Nexa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jervois Mining and Nexa Resources SA, you can compare the effects of market volatilities on Jervois Mining and Nexa Resources 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 Jervois Mining with a short position of Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jervois Mining and Nexa Resources.
Diversification Opportunities for Jervois Mining and Nexa Resources
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jervois and Nexa is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jervois Mining and Nexa Resources SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources SA and Jervois Mining 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 Jervois Mining are associated (or correlated) with Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources SA has no effect on the direction of Jervois Mining i.e., Jervois Mining and Nexa Resources go up and down completely randomly.
Pair Corralation between Jervois Mining and Nexa Resources
Assuming the 90 days horizon Jervois Mining is not expected to generate positive returns. Moreover, Jervois Mining is 6.55 times more volatile than Nexa Resources SA. It trades away all of its potential returns to assume current level of volatility. Nexa Resources SA is currently generating about 0.05 per unit of risk. If you would invest 769.00 in Nexa Resources SA on September 5, 2024 and sell it today you would earn a total of 10.00 from holding Nexa Resources SA or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jervois Mining vs. Nexa Resources SA
Performance |
| Timeline |
| Jervois Mining |
| Nexa Resources SA |
Jervois Mining and Nexa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jervois Mining and Nexa Resources
The main advantage of trading using opposite Jervois Mining and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jervois Mining position performs unexpectedly, Nexa Resources 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 Nexa Resources will offset losses from the drop in Nexa Resources' long position.| Jervois Mining vs. Ardea Resources Limited | Jervois Mining vs. Centaurus Metals Limited | Jervois Mining vs. Canada Silver Cobalt | Jervois Mining vs. Blackstone Minerals |
| Nexa Resources vs. Qubec Nickel Corp | Nexa Resources vs. American Rare Earths | Nexa Resources vs. Cypress Development Corp | Nexa Resources vs. Jervois Mining |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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