Correlation Between NeXGold Mining and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Manulife 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 Manulife 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 Manulife Financial Corp, you can compare the effects of market volatilities on NeXGold Mining and Manulife 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 Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Manulife Financial.
Diversification Opportunities for NeXGold Mining and Manulife Financial
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NeXGold and Manulife is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife 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 Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial Corp has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Manulife Financial go up and down completely randomly.
Pair Corralation between NeXGold Mining and Manulife Financial
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to generate 5.38 times more return on investment than Manulife Financial. However, NeXGold Mining is 5.38 times more volatile than Manulife Financial Corp. It trades about 0.02 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.1 per unit of risk. If you would invest 68.00 in NeXGold Mining Corp on September 4, 2024 and sell it today you would lose (2.00) from holding NeXGold Mining Corp or give up 2.94% 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. Manulife Financial Corp
Performance |
| Timeline |
| NeXGold Mining Corp |
| Manulife Financial Corp |
NeXGold Mining and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Manulife Financial
The main advantage of trading using opposite NeXGold Mining and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Manulife 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 Manulife Financial will offset losses from the drop in Manulife Financial's long position.| NeXGold Mining vs. Andlauer Healthcare Gr | NeXGold Mining vs. Lion One Metals | NeXGold Mining vs. UnitedHealth Group CDR | NeXGold Mining vs. Jamieson Wellness |
| Manulife Financial vs. Medical Facilities | Manulife Financial vs. Hemisphere Energy | Manulife Financial vs. Orbit Garant Drilling | Manulife Financial vs. InPlay Oil 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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