Correlation Between Northern Dynasty and Talga Group
Can any of the company-specific risk be diversified away by investing in both Northern Dynasty and Talga Group 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 Northern Dynasty and Talga Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Dynasty Minerals and Talga Group, you can compare the effects of market volatilities on Northern Dynasty and Talga Group 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 Northern Dynasty with a short position of Talga Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Dynasty and Talga Group.
Diversification Opportunities for Northern Dynasty and Talga Group
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northern and Talga is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Northern Dynasty Minerals and Talga Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talga Group and Northern Dynasty 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 Northern Dynasty Minerals are associated (or correlated) with Talga Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talga Group has no effect on the direction of Northern Dynasty i.e., Northern Dynasty and Talga Group go up and down completely randomly.
Pair Corralation between Northern Dynasty and Talga Group
Considering the 90-day investment horizon Northern Dynasty Minerals is expected to generate 0.62 times more return on investment than Talga Group. However, Northern Dynasty Minerals is 1.63 times less risky than Talga Group. It trades about 0.1 of its potential returns per unit of risk. Talga Group is currently generating about 0.02 per unit of risk. If you would invest 27.00 in Northern Dynasty Minerals on November 9, 2024 and sell it today you would earn a total of 47.00 from holding Northern Dynasty Minerals or generate 174.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Dynasty Minerals vs. Talga Group
Performance |
| Timeline |
| Northern Dynasty Minerals |
| Talga Group |
Northern Dynasty and Talga Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Dynasty and Talga Group
The main advantage of trading using opposite Northern Dynasty and Talga Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Dynasty position performs unexpectedly, Talga Group 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 Talga Group will offset losses from the drop in Talga Group's long position.| Northern Dynasty vs. Vizsla Resources Corp | Northern Dynasty vs. Western Copper and | Northern Dynasty vs. Americas Silver Corp | Northern Dynasty vs. EMX Royalty Corp |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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