Correlation Between NeXGold Mining and Definity Financial
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Definity Financial 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 Definity Financial 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 Definity Financial Corp, you can compare the effects of market volatilities on NeXGold Mining and Definity Financial 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 Definity Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Definity Financial.
Diversification Opportunities for NeXGold Mining and Definity Financial
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NeXGold and Definity is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Definity Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Definity Financial 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 Definity Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Definity Financial Corp has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Definity Financial go up and down completely randomly.
Pair Corralation between NeXGold Mining and Definity Financial
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Definity Financial. In addition to that, NeXGold Mining is 3.02 times more volatile than Definity Financial Corp. It trades about -0.05 of its total potential returns per unit of risk. Definity Financial Corp is currently generating about 0.19 per unit of volatility. If you would invest 4,297 in Definity Financial Corp on September 2, 2024 and sell it today you would earn a total of 1,556 from holding Definity Financial Corp or generate 36.21% 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. Definity Financial Corp
Performance |
| Timeline |
| NeXGold Mining Corp |
| Definity Financial Corp |
NeXGold Mining and Definity Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Definity Financial
The main advantage of trading using opposite NeXGold Mining and Definity Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Definity Financial 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 Definity Financial will offset losses from the drop in Definity Financial's long position.| NeXGold Mining vs. Royal Bank of | NeXGold Mining vs. Canso Credit Trust | NeXGold Mining vs. CI Financial Corp | NeXGold Mining vs. Olympia Financial Group |
| Definity Financial vs. Trisura Group | Definity Financial vs. Pet Valu Holdings | Definity Financial vs. Intact Financial | Definity Financial vs. Topaz Energy 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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