Correlation Between NeXGold Mining and Bausch Health
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Bausch Health 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 Bausch Health 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 Bausch Health Companies, you can compare the effects of market volatilities on NeXGold Mining and Bausch Health 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 Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Bausch Health.
Diversification Opportunities for NeXGold Mining and Bausch Health
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between NeXGold and Bausch is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies 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 Bausch Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Bausch Health go up and down completely randomly.
Pair Corralation between NeXGold Mining and Bausch Health
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Bausch Health. In addition to that, NeXGold Mining is 1.24 times more volatile than Bausch Health Companies. It trades about -0.02 of its total potential returns per unit of risk. Bausch Health Companies is currently generating about 0.13 per unit of volatility. If you would invest 824.00 in Bausch Health Companies on August 27, 2024 and sell it today you would earn a total of 293.00 from holding Bausch Health Companies or generate 35.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeXGold Mining Corp vs. Bausch Health Companies
Performance |
| Timeline |
| NeXGold Mining Corp |
| Bausch Health Companies |
NeXGold Mining and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Bausch Health
The main advantage of trading using opposite NeXGold Mining and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Bausch Health 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 Bausch Health will offset losses from the drop in Bausch Health's long position.| NeXGold Mining vs. Bip Investment Corp | NeXGold Mining vs. Economic Investment Trust | NeXGold Mining vs. Faction Investment Group | NeXGold Mining vs. Plaza Retail REIT |
| Bausch Health vs. Auxly Cannabis Group | Bausch Health vs. Entourage Health Corp | Bausch Health vs. iShares Canadian HYBrid | Bausch Health vs. Altagas Cum Red |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |