Correlation Between NeXGold Mining and Great West
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Great West 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 Great West 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 Great West Lifeco, you can compare the effects of market volatilities on NeXGold Mining and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Great West.
Diversification Opportunities for NeXGold Mining and Great West
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NeXGold and Great is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Great West go up and down completely randomly.
Pair Corralation between NeXGold Mining and Great West
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to generate 4.29 times more return on investment than Great West. However, NeXGold Mining is 4.29 times more volatile than Great West Lifeco. It trades about 0.28 of its potential returns per unit of risk. Great West Lifeco is currently generating about 0.18 per unit of risk. If you would invest 66.00 in NeXGold Mining Corp on September 15, 2024 and sell it today you would earn a total of 10.00 from holding NeXGold Mining Corp or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeXGold Mining Corp vs. Great West Lifeco
Performance |
| Timeline |
| NeXGold Mining Corp |
| Great West Lifeco |
NeXGold Mining and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Great West
The main advantage of trading using opposite NeXGold Mining and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| NeXGold Mining vs. Barrick Gold Corp | NeXGold Mining vs. Kinross Gold Corp | NeXGold Mining vs. Alamos Gold | NeXGold Mining vs. Endeavour Mining Corp |
| Great West vs. Aya Gold Silver | Great West vs. NeXGold Mining Corp | Great West vs. Income Financial Trust | Great West vs. Definity Financial 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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