Correlation Between Loncor Gold and Norsemont Mining
Can any of the company-specific risk be diversified away by investing in both Loncor Gold and Norsemont 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 Loncor Gold and Norsemont Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loncor Gold and Norsemont Mining, you can compare the effects of market volatilities on Loncor Gold and Norsemont 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 Loncor Gold with a short position of Norsemont Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loncor Gold and Norsemont Mining.
Diversification Opportunities for Loncor Gold and Norsemont Mining
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Loncor and Norsemont is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Loncor Gold and Norsemont Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norsemont Mining and Loncor 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 Loncor Gold are associated (or correlated) with Norsemont Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norsemont Mining has no effect on the direction of Loncor Gold i.e., Loncor Gold and Norsemont Mining go up and down completely randomly.
Pair Corralation between Loncor Gold and Norsemont Mining
If you would invest 26.00 in Loncor Gold on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Loncor Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 2.5% |
| Values | Daily Returns |
Loncor Gold vs. Norsemont Mining
Performance |
| Timeline |
| Loncor Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Norsemont Mining |
Loncor Gold and Norsemont Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loncor Gold and Norsemont Mining
The main advantage of trading using opposite Loncor Gold and Norsemont Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loncor Gold position performs unexpectedly, Norsemont 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 Norsemont Mining will offset losses from the drop in Norsemont Mining's long position.| Loncor Gold vs. Galiano Gold | Loncor Gold vs. Brunswick Exploration | Loncor Gold vs. B2Gold Corp | Loncor Gold vs. Japan Gold Corp |
| Norsemont Mining vs. Newcore Gold | Norsemont Mining vs. Cerrado Gold | Norsemont Mining vs. Palamina Corp | Norsemont Mining vs. Gold Springs Resource |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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