Correlation Between Los Andes and NV Gold

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Can any of the company-specific risk be diversified away by investing in both Los Andes and NV 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 Los Andes and NV Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Los Andes Copper and NV Gold Corp, you can compare the effects of market volatilities on Los Andes and NV 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 Los Andes with a short position of NV Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Los Andes and NV Gold.

Diversification Opportunities for Los Andes and NV Gold

LosNVXDiversified AwayLosNVXDiversified Away100%
0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Los and NVX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Los Andes Copper and NV Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Gold Corp and Los Andes 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 Los Andes Copper are associated (or correlated) with NV Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Gold Corp has no effect on the direction of Los Andes i.e., Los Andes and NV Gold go up and down completely randomly.

Pair Corralation between Los Andes and NV Gold

Given the investment horizon of 90 days Los Andes Copper is expected to under-perform the NV Gold. But the stock apears to be less risky and, when comparing its historical volatility, Los Andes Copper is 2.13 times less risky than NV Gold. The stock trades about -0.19 of its potential returns per unit of risk. The NV Gold Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  15.00  in NV Gold Corp on November 30, 2024 and sell it today you would earn a total of  1.00  from holding NV Gold Corp or generate 6.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Los Andes Copper  vs.  NV Gold Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-10010
JavaScript chart by amCharts 3.21.15LA NVX
       Timeline  
Los Andes Copper 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Los Andes Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb66.577.588.5
NV Gold Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days NV Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.150.160.170.180.190.20.210.22

Los Andes and NV Gold Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.53-5.64-3.75-1.860.01.833.655.487.31 0.0100.0120.0140.0160.018
JavaScript chart by amCharts 3.21.15LA NVX
       Returns  

Pair Trading with Los Andes and NV Gold

The main advantage of trading using opposite Los Andes and NV Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Los Andes position performs unexpectedly, NV 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 NV Gold will offset losses from the drop in NV Gold's long position.
The idea behind Los Andes Copper and NV Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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