Correlation Between NeXGold Mining and Canadian Net
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Canadian Net 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 Canadian Net 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 Canadian Net Real, you can compare the effects of market volatilities on NeXGold Mining and Canadian Net 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 Canadian Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Canadian Net.
Diversification Opportunities for NeXGold Mining and Canadian Net
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NeXGold and Canadian is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Canadian Net Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Net Real 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 Canadian Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Net Real has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Canadian Net go up and down completely randomly.
Pair Corralation between NeXGold Mining and Canadian Net
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Canadian Net. In addition to that, NeXGold Mining is 1.5 times more volatile than Canadian Net Real. It trades about -0.03 of its total potential returns per unit of risk. Canadian Net Real is currently generating about -0.01 per unit of volatility. If you would invest 523.00 in Canadian Net Real on October 20, 2024 and sell it today you would lose (3.00) from holding Canadian Net Real or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
NeXGold Mining Corp vs. Canadian Net Real
Performance |
| Timeline |
| NeXGold Mining Corp |
| Canadian Net Real |
NeXGold Mining and Canadian Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Canadian Net
The main advantage of trading using opposite NeXGold Mining and Canadian Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Canadian Net 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 Canadian Net will offset losses from the drop in Canadian Net's long position.| NeXGold Mining vs. Canadian General Investments | NeXGold Mining vs. Western Investment | NeXGold Mining vs. Aya Gold Silver | NeXGold Mining vs. Partners Value Investments |
| Canadian Net vs. Excelsior Mining Corp | Canadian Net vs. Vista Gold | Canadian Net vs. TeraGo Inc | Canadian Net vs. Condor Energies |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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