Correlation Between NGEx Minerals and Ascendant Resources
Can any of the company-specific risk be diversified away by investing in both NGEx Minerals and Ascendant Resources 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 NGEx Minerals and Ascendant Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NGEx Minerals and Ascendant Resources, you can compare the effects of market volatilities on NGEx Minerals and Ascendant Resources 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 NGEx Minerals with a short position of Ascendant Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGEx Minerals and Ascendant Resources.
Diversification Opportunities for NGEx Minerals and Ascendant Resources
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NGEx and Ascendant is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NGEx Minerals and Ascendant Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendant Resources and NGEx Minerals 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 NGEx Minerals are associated (or correlated) with Ascendant Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendant Resources has no effect on the direction of NGEx Minerals i.e., NGEx Minerals and Ascendant Resources go up and down completely randomly.
Pair Corralation between NGEx Minerals and Ascendant Resources
Assuming the 90 days horizon NGEx Minerals is expected to generate 12.78 times less return on investment than Ascendant Resources. But when comparing it to its historical volatility, NGEx Minerals is 4.34 times less risky than Ascendant Resources. It trades about 0.09 of its potential returns per unit of risk. Ascendant Resources is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Ascendant Resources on October 26, 2024 and sell it today you would earn a total of 1.17 from holding Ascendant Resources or generate 39.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NGEx Minerals vs. Ascendant Resources
Performance |
| Timeline |
| NGEx Minerals |
| Ascendant Resources |
NGEx Minerals and Ascendant Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NGEx Minerals and Ascendant Resources
The main advantage of trading using opposite NGEx Minerals and Ascendant Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGEx Minerals position performs unexpectedly, Ascendant Resources 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 Ascendant Resources will offset losses from the drop in Ascendant Resources' long position.| NGEx Minerals vs. Boss Resources | NGEx Minerals vs. Forum Energy Metals | NGEx Minerals vs. Global Atomic Corp | NGEx Minerals vs. Kraken Energy Corp |
| Ascendant Resources vs. Hannan Metals | Ascendant Resources vs. Atco Mining | Ascendant Resources vs. Leading Edge Materials | Ascendant Resources vs. Arianne Phosphate |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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