Correlation Between NeXGold Mining and Metalero Mining
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Metalero Mining 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 Metalero Mining 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 Metalero Mining Corp, you can compare the effects of market volatilities on NeXGold Mining and Metalero Mining 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 Metalero Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Metalero Mining.
Diversification Opportunities for NeXGold Mining and Metalero Mining
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NeXGold and Metalero is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Metalero Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalero Mining 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 Metalero Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalero Mining Corp has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Metalero Mining go up and down completely randomly.
Pair Corralation between NeXGold Mining and Metalero Mining
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Metalero Mining. But the stock apears to be less risky and, when comparing its historical volatility, NeXGold Mining Corp is 1.01 times less risky than Metalero Mining. The stock trades about -0.32 of its potential returns per unit of risk. The Metalero Mining Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Metalero Mining Corp on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Metalero Mining Corp or generate 0.0% 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. Metalero Mining Corp
Performance |
| Timeline |
| NeXGold Mining Corp |
| Metalero Mining Corp |
NeXGold Mining and Metalero Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Metalero Mining
The main advantage of trading using opposite NeXGold Mining and Metalero Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Metalero Mining 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 Metalero Mining will offset losses from the drop in Metalero Mining's long position.| NeXGold Mining vs. Agnico Eagle Mines | NeXGold Mining vs. Barrick Gold Corp | NeXGold Mining vs. Wheaton Precious Metals | NeXGold Mining vs. Franco Nevada |
| Metalero Mining vs. Agnico Eagle Mines | Metalero Mining vs. Barrick Gold Corp | Metalero Mining vs. Wheaton Precious Metals | Metalero Mining vs. Franco Nevada |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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