Correlation Between NEXA RESOURCES and ANDRADA MINING
Can any of the company-specific risk be diversified away by investing in both NEXA RESOURCES and ANDRADA 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 NEXA RESOURCES and ANDRADA MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXA RESOURCES SA and ANDRADA MINING LTD, you can compare the effects of market volatilities on NEXA RESOURCES and ANDRADA 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 NEXA RESOURCES with a short position of ANDRADA MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXA RESOURCES and ANDRADA MINING.
Diversification Opportunities for NEXA RESOURCES and ANDRADA MINING
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEXA and ANDRADA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding NEXA RESOURCES SA and ANDRADA MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANDRADA MINING LTD and NEXA RESOURCES 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 NEXA RESOURCES SA are associated (or correlated) with ANDRADA MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANDRADA MINING LTD has no effect on the direction of NEXA RESOURCES i.e., NEXA RESOURCES and ANDRADA MINING go up and down completely randomly.
Pair Corralation between NEXA RESOURCES and ANDRADA MINING
Assuming the 90 days horizon NEXA RESOURCES SA is expected to generate 0.58 times more return on investment than ANDRADA MINING. However, NEXA RESOURCES SA is 1.71 times less risky than ANDRADA MINING. It trades about 0.05 of its potential returns per unit of risk. ANDRADA MINING LTD is currently generating about -0.04 per unit of risk. If you would invest 492.00 in NEXA RESOURCES SA on August 31, 2024 and sell it today you would earn a total of 223.00 from holding NEXA RESOURCES SA or generate 45.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEXA RESOURCES SA vs. ANDRADA MINING LTD
Performance |
| Timeline |
| NEXA RESOURCES SA |
| ANDRADA MINING LTD |
NEXA RESOURCES and ANDRADA MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXA RESOURCES and ANDRADA MINING
The main advantage of trading using opposite NEXA RESOURCES and ANDRADA MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXA RESOURCES position performs unexpectedly, ANDRADA 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 ANDRADA MINING will offset losses from the drop in ANDRADA MINING's long position.| NEXA RESOURCES vs. Computer And Technologies | NEXA RESOURCES vs. ARDAGH METAL PACDL 0001 | NEXA RESOURCES vs. Check Point Software | NEXA RESOURCES vs. PKSHA TECHNOLOGY INC |
| ANDRADA MINING vs. Rio Tinto Group | ANDRADA MINING vs. Liontown Resources Limited | ANDRADA MINING vs. American Lithium Corp |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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