Correlation Between NV Gold and First Mining
Can any of the company-specific risk be diversified away by investing in both NV Gold and First Mining 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 NV Gold and First Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NV Gold Corp and First Mining Gold, you can compare the effects of market volatilities on NV Gold and First Mining 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 NV Gold with a short position of First Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NV Gold and First Mining.
Diversification Opportunities for NV Gold and First Mining
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NVX and First is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding NV Gold Corp and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold and NV Gold 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 NV Gold Corp are associated (or correlated) with First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of NV Gold i.e., NV Gold and First Mining go up and down completely randomly.
Pair Corralation between NV Gold and First Mining
Assuming the 90 days horizon NV Gold Corp is expected to under-perform the First Mining. But the stock apears to be less risky and, when comparing its historical volatility, NV Gold Corp is 1.6 times less risky than First Mining. The stock trades about -0.04 of its potential returns per unit of risk. The First Mining Gold is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7.00 in First Mining Gold on November 6, 2024 and sell it today you would earn a total of 7.00 from holding First Mining Gold or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
NV Gold Corp vs. First Mining Gold
Performance |
| Timeline |
| NV Gold Corp |
| First Mining Gold |
NV Gold and First Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NV Gold and First Mining
The main advantage of trading using opposite NV Gold and First Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NV Gold position performs unexpectedly, First Mining 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 First Mining will offset losses from the drop in First Mining's long position.| NV Gold vs. Nulegacy Gold | NV Gold vs. Nexus Gold Corp | NV Gold vs. Falcon Gold Corp | NV Gold vs. Pasofino Gold Limited |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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