Correlation Between Monument Mining and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Monument Mining and NeXGold 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 Monument Mining and NeXGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monument Mining Limited and NeXGold Mining Corp, you can compare the effects of market volatilities on Monument Mining and NeXGold 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 Monument Mining with a short position of NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and NeXGold Mining.
Diversification Opportunities for Monument Mining and NeXGold Mining
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Monument and NeXGold is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold Mining Corp and Monument 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 Monument Mining Limited are associated (or correlated) with NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of Monument Mining i.e., Monument Mining and NeXGold Mining go up and down completely randomly.
Pair Corralation between Monument Mining and NeXGold Mining
Assuming the 90 days horizon Monument Mining Limited is expected to generate 1.05 times more return on investment than NeXGold Mining. However, Monument Mining is 1.05 times more volatile than NeXGold Mining Corp. It trades about 0.08 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about -0.01 per unit of risk. If you would invest 10.00 in Monument Mining Limited on November 27, 2024 and sell it today you would earn a total of 27.00 from holding Monument Mining Limited or generate 270.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. NeXGold Mining Corp
Performance |
| Timeline |
| Monument Mining |
| NeXGold Mining Corp |
Monument Mining and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and NeXGold Mining
The main advantage of trading using opposite Monument Mining and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, NeXGold 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 NeXGold Mining will offset losses from the drop in NeXGold Mining's long position.| Monument Mining vs. Majestic Gold Corp | Monument Mining vs. Gunpoint Exploration | Monument Mining vs. Q Gold Resources | Monument Mining vs. Mundoro Capital |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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