Correlation Between NeXGold Mining and Abaxx Technologies
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Abaxx Technologies 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 Abaxx Technologies 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 Abaxx Technologies, you can compare the effects of market volatilities on NeXGold Mining and Abaxx Technologies 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 Abaxx Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Abaxx Technologies.
Diversification Opportunities for NeXGold Mining and Abaxx Technologies
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between NeXGold and Abaxx is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Abaxx Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abaxx Technologies 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 Abaxx Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abaxx Technologies has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Abaxx Technologies go up and down completely randomly.
Pair Corralation between NeXGold Mining and Abaxx Technologies
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Abaxx Technologies. In addition to that, NeXGold Mining is 1.01 times more volatile than Abaxx Technologies. It trades about -0.19 of its total potential returns per unit of risk. Abaxx Technologies is currently generating about -0.18 per unit of volatility. If you would invest 1,200 in Abaxx Technologies on November 6, 2024 and sell it today you would lose (92.00) from holding Abaxx Technologies or give up 7.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeXGold Mining Corp vs. Abaxx Technologies
Performance |
| Timeline |
| NeXGold Mining Corp |
| Abaxx Technologies |
NeXGold Mining and Abaxx Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Abaxx Technologies
The main advantage of trading using opposite NeXGold Mining and Abaxx Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Abaxx Technologies 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 Abaxx Technologies will offset losses from the drop in Abaxx Technologies' long position.| NeXGold Mining vs. Storage Vault Canada | NeXGold Mining vs. Ramp Metals | NeXGold Mining vs. Datable Technology Corp | NeXGold Mining vs. XXIX Metal Corp |
| Abaxx Technologies vs. Ramp Metals | Abaxx Technologies vs. Advent Wireless | Abaxx Technologies vs. Sun Peak Metals | Abaxx Technologies vs. Altair Resources |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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