Correlation Between NextSource Materials and Slam Exploration
Can any of the company-specific risk be diversified away by investing in both NextSource Materials and Slam Exploration 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 NextSource Materials and Slam Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextSource Materials and Slam Exploration, you can compare the effects of market volatilities on NextSource Materials and Slam Exploration 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 NextSource Materials with a short position of Slam Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextSource Materials and Slam Exploration.
Diversification Opportunities for NextSource Materials and Slam Exploration
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NextSource and Slam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NextSource Materials and Slam Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slam Exploration and NextSource Materials 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 NextSource Materials are associated (or correlated) with Slam Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slam Exploration has no effect on the direction of NextSource Materials i.e., NextSource Materials and Slam Exploration go up and down completely randomly.
Pair Corralation between NextSource Materials and Slam Exploration
Assuming the 90 days trading horizon NextSource Materials is expected to under-perform the Slam Exploration. But the stock apears to be less risky and, when comparing its historical volatility, NextSource Materials is 3.98 times less risky than Slam Exploration. The stock trades about -0.18 of its potential returns per unit of risk. The Slam Exploration is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Slam Exploration on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Slam Exploration or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
NextSource Materials vs. Slam Exploration
Performance |
| Timeline |
| NextSource Materials |
| Slam Exploration |
NextSource Materials and Slam Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextSource Materials and Slam Exploration
The main advantage of trading using opposite NextSource Materials and Slam Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextSource Materials position performs unexpectedly, Slam Exploration 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 Slam Exploration will offset losses from the drop in Slam Exploration's long position.| NextSource Materials vs. Leading Edge Materials | NextSource Materials vs. Northern Graphite | NextSource Materials vs. Lomiko Metals | NextSource Materials vs. Elcora Advanced Materials |
| Slam Exploration vs. Algoma Steel Group | Slam Exploration vs. Champion Iron | Slam Exploration vs. International Zeolite Corp | Slam Exploration vs. European Residential Real |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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