Correlation Between NeXGold Mining and Power Fi
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Power Fi 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 Power Fi 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 Power Fi 440, you can compare the effects of market volatilities on NeXGold Mining and Power Fi 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 Power Fi. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Power Fi.
Diversification Opportunities for NeXGold Mining and Power Fi
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NeXGold and Power is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Power Fi 440 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Fi 440 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 Power Fi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Fi 440 has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Power Fi go up and down completely randomly.
Pair Corralation between NeXGold Mining and Power Fi
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Power Fi. In addition to that, NeXGold Mining is 3.04 times more volatile than Power Fi 440. It trades about -0.11 of its total potential returns per unit of risk. Power Fi 440 is currently generating about 0.42 per unit of volatility. If you would invest 1,600 in Power Fi 440 on October 21, 2024 and sell it today you would earn a total of 87.00 from holding Power Fi 440 or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeXGold Mining Corp vs. Power Fi 440
Performance |
| Timeline |
| NeXGold Mining Corp |
| Power Fi 440 |
NeXGold Mining and Power Fi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Power Fi
The main advantage of trading using opposite NeXGold Mining and Power Fi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Power Fi 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 Power Fi will offset losses from the drop in Power Fi'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 |
| Power Fi vs. Manulife Financial Corp | Power Fi vs. Great West Lifeco | Power Fi vs. Power | Power Fi vs. Alignvest Acquisition II |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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