Correlation Between Newport Gold and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both Newport Gold and NioCorp Developments 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 Newport Gold and NioCorp Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newport Gold and NioCorp Developments Ltd, you can compare the effects of market volatilities on Newport Gold and NioCorp Developments 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 Newport Gold with a short position of NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newport Gold and NioCorp Developments.
Diversification Opportunities for Newport Gold and NioCorp Developments
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Newport and NioCorp is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Newport Gold and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments and Newport 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 Newport Gold are associated (or correlated) with NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of Newport Gold i.e., Newport Gold and NioCorp Developments go up and down completely randomly.
Pair Corralation between Newport Gold and NioCorp Developments
Given the investment horizon of 90 days Newport Gold is expected to generate 9.06 times more return on investment than NioCorp Developments. However, Newport Gold is 9.06 times more volatile than NioCorp Developments Ltd. It trades about 0.18 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about -0.37 per unit of risk. If you would invest 0.16 in Newport Gold on September 1, 2024 and sell it today you would earn a total of 0.11 from holding Newport Gold or generate 68.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newport Gold vs. NioCorp Developments Ltd
Performance |
| Timeline |
| Newport Gold |
| NioCorp Developments |
Newport Gold and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newport Gold and NioCorp Developments
The main advantage of trading using opposite Newport Gold and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newport Gold position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' long position.| Newport Gold vs. Callinex Mines | Newport Gold vs. NioCorp Developments Ltd | Newport Gold vs. Lithium Americas Corp | Newport Gold vs. Sigma Lithium Resources |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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