Correlation Between New Found and Labrador Gold
Can any of the company-specific risk be diversified away by investing in both New Found and Labrador Gold 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 New Found and Labrador Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Found Gold and Labrador Gold Corp, you can compare the effects of market volatilities on New Found and Labrador Gold 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 New Found with a short position of Labrador Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Found and Labrador Gold.
Diversification Opportunities for New Found and Labrador Gold
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Labrador is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding New Found Gold and Labrador Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador Gold Corp and New Found 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 New Found Gold are associated (or correlated) with Labrador Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Gold Corp has no effect on the direction of New Found i.e., New Found and Labrador Gold go up and down completely randomly.
Pair Corralation between New Found and Labrador Gold
Assuming the 90 days horizon New Found Gold is expected to generate 0.6 times more return on investment than Labrador Gold. However, New Found Gold is 1.68 times less risky than Labrador Gold. It trades about -0.03 of its potential returns per unit of risk. Labrador Gold Corp is currently generating about -0.03 per unit of risk. If you would invest 546.00 in New Found Gold on September 3, 2024 and sell it today you would lose (293.00) from holding New Found Gold or give up 53.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Found Gold vs. Labrador Gold Corp
Performance |
| Timeline |
| New Found Gold |
| Labrador Gold Corp |
New Found and Labrador Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Found and Labrador Gold
The main advantage of trading using opposite New Found and Labrador Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Found position performs unexpectedly, Labrador Gold 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 Labrador Gold will offset losses from the drop in Labrador Gold's long position.| New Found vs. SalesforceCom CDR | New Found vs. Metalero Mining Corp | New Found vs. Mako Mining Corp | New Found vs. Capstone Mining Corp |
| Labrador Gold vs. Algoma Steel Group | Labrador Gold vs. Champion Iron | Labrador Gold vs. International Zeolite Corp | Labrador Gold 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |