Correlation Between NGEx Minerals and Group Ten
Can any of the company-specific risk be diversified away by investing in both NGEx Minerals and Group Ten 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 Group Ten into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NGEx Minerals and Group Ten Metals, you can compare the effects of market volatilities on NGEx Minerals and Group Ten 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 Group Ten. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGEx Minerals and Group Ten.
Diversification Opportunities for NGEx Minerals and Group Ten
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NGEx and Group is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NGEx Minerals and Group Ten Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Ten Metals 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 Group Ten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Ten Metals has no effect on the direction of NGEx Minerals i.e., NGEx Minerals and Group Ten go up and down completely randomly.
Pair Corralation between NGEx Minerals and Group Ten
Assuming the 90 days horizon NGEx Minerals is expected to generate 0.31 times more return on investment than Group Ten. However, NGEx Minerals is 3.25 times less risky than Group Ten. It trades about 0.18 of its potential returns per unit of risk. Group Ten Metals is currently generating about -0.14 per unit of risk. If you would invest 822.00 in NGEx Minerals on September 1, 2024 and sell it today you would earn a total of 64.00 from holding NGEx Minerals or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NGEx Minerals vs. Group Ten Metals
Performance |
| Timeline |
| NGEx Minerals |
| Group Ten Metals |
NGEx Minerals and Group Ten Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NGEx Minerals and Group Ten
The main advantage of trading using opposite NGEx Minerals and Group Ten positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGEx Minerals position performs unexpectedly, Group Ten 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 Group Ten will offset losses from the drop in Group Ten's 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 |
| Group Ten vs. Ascendant Resources | Group Ten vs. Atico Mining | Group Ten vs. Prime Mining Corp | Group Ten vs. Wallbridge Mining |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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