Correlation Between NeXGold Mining and Solution Financial
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Solution 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 Solution 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 Solution Financial, you can compare the effects of market volatilities on NeXGold Mining and Solution 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 Solution Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Solution Financial.
Diversification Opportunities for NeXGold Mining and Solution Financial
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NeXGold and Solution is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Solution Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Financial 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 Solution Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Financial has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Solution Financial go up and down completely randomly.
Pair Corralation between NeXGold Mining and Solution Financial
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Solution Financial. In addition to that, NeXGold Mining is 1.52 times more volatile than Solution Financial. It trades about -0.01 of its total potential returns per unit of risk. Solution Financial is currently generating about 0.01 per unit of volatility. If you would invest 30.00 in Solution Financial on September 25, 2024 and sell it today you would lose (2.00) from holding Solution Financial or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeXGold Mining Corp vs. Solution Financial
Performance |
| Timeline |
| NeXGold Mining Corp |
| Solution Financial |
NeXGold Mining and Solution Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Solution Financial
The main advantage of trading using opposite NeXGold Mining and Solution Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Solution 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 Solution Financial will offset losses from the drop in Solution Financial's long position.| NeXGold Mining vs. UnitedHealth Group CDR | NeXGold Mining vs. Champion Iron | NeXGold Mining vs. NorthWest Healthcare Properties | NeXGold Mining vs. CVS HEALTH CDR |
| Solution Financial vs. Stampede Drilling | Solution Financial vs. Atrium Mortgage Investment | Solution Financial vs. Dream Office Real | Solution Financial vs. Eddy Smart Home |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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