Correlation Between NeXGold Mining and Earth Alive
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Earth Alive 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 Earth Alive 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 Earth Alive Clean, you can compare the effects of market volatilities on NeXGold Mining and Earth Alive 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 Earth Alive. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Earth Alive.
Diversification Opportunities for NeXGold Mining and Earth Alive
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NeXGold and Earth is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Earth Alive Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Earth Alive Clean 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 Earth Alive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Earth Alive Clean has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Earth Alive go up and down completely randomly.
Pair Corralation between NeXGold Mining and Earth Alive
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Earth Alive. But the stock apears to be less risky and, when comparing its historical volatility, NeXGold Mining Corp is 10.78 times less risky than Earth Alive. The stock trades about -0.01 of its potential returns per unit of risk. The Earth Alive Clean is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Earth Alive Clean on November 5, 2024 and sell it today you would lose (2.00) from holding Earth Alive Clean or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeXGold Mining Corp vs. Earth Alive Clean
Performance |
| Timeline |
| NeXGold Mining Corp |
| Earth Alive Clean |
NeXGold Mining and Earth Alive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Earth Alive
The main advantage of trading using opposite NeXGold Mining and Earth Alive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Earth Alive 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 Earth Alive will offset losses from the drop in Earth Alive's long position.| NeXGold Mining vs. Newmont Goldcorp Corp | NeXGold Mining vs. Agnico Eagle Mines | NeXGold Mining vs. Barrick Gold Corp | NeXGold Mining vs. Wheaton Precious Metals |
| Earth Alive vs. NeuPath Health | Earth Alive vs. NeXGold Mining Corp | Earth Alive vs. Nicola Mining | Earth Alive vs. Magna Mining |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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