Correlation Between NeXGold Mining and Arbor Metals
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Arbor Metals 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 NeXGold Mining and Arbor Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NeXGold Mining Corp and Arbor Metals Corp, you can compare the effects of market volatilities on NeXGold Mining and Arbor Metals 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 NeXGold Mining with a short position of Arbor Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Arbor Metals.
Diversification Opportunities for NeXGold Mining and Arbor Metals
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NeXGold and Arbor is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Arbor Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Metals Corp and NeXGold 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 NeXGold Mining Corp are associated (or correlated) with Arbor Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Metals Corp has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Arbor Metals go up and down completely randomly.
Pair Corralation between NeXGold Mining and Arbor Metals
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Arbor Metals. In addition to that, NeXGold Mining is 1.06 times more volatile than Arbor Metals Corp. It trades about -0.08 of its total potential returns per unit of risk. Arbor Metals Corp is currently generating about -0.08 per unit of volatility. If you would invest 56.00 in Arbor Metals Corp on August 24, 2024 and sell it today you would lose (21.00) from holding Arbor Metals Corp or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeXGold Mining Corp vs. Arbor Metals Corp
Performance |
| Timeline |
| NeXGold Mining Corp |
| Arbor Metals Corp |
NeXGold Mining and Arbor Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Arbor Metals
The main advantage of trading using opposite NeXGold Mining and Arbor Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Arbor Metals 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 Arbor Metals will offset losses from the drop in Arbor Metals' long position.| NeXGold Mining vs. Agnico Eagle Mines | NeXGold Mining vs. Barrick Gold Corp | NeXGold Mining vs. Wheaton Precious Metals | NeXGold Mining vs. Kinross Gold Corp |
| Arbor Metals vs. Fairfax Financial Holdings | Arbor Metals vs. US Financial 15 | Arbor Metals vs. Aurora Solar Technologies | Arbor Metals vs. Solar Alliance Energy |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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