Correlation Between Group Ten and NGEx Minerals
Can any of the company-specific risk be diversified away by investing in both Group Ten and NGEx Minerals 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 Group Ten and NGEx Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group Ten Metals and NGEx Minerals, you can compare the effects of market volatilities on Group Ten and NGEx Minerals 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 Group Ten with a short position of NGEx Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group Ten and NGEx Minerals.
Diversification Opportunities for Group Ten and NGEx Minerals
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Group and NGEx is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Group Ten Metals and NGEx Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGEx Minerals and Group Ten 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 Group Ten Metals are associated (or correlated) with NGEx Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGEx Minerals has no effect on the direction of Group Ten i.e., Group Ten and NGEx Minerals go up and down completely randomly.
Pair Corralation between Group Ten and NGEx Minerals
Assuming the 90 days horizon Group Ten Metals is expected to under-perform the NGEx Minerals. In addition to that, Group Ten is 3.72 times more volatile than NGEx Minerals. It trades about -0.1 of its total potential returns per unit of risk. NGEx Minerals is currently generating about 0.12 per unit of volatility. If you would invest 848.00 in NGEx Minerals on August 29, 2024 and sell it today you would earn a total of 45.00 from holding NGEx Minerals or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group Ten Metals vs. NGEx Minerals
Performance |
| Timeline |
| Group Ten Metals |
| NGEx Minerals |
Group Ten and NGEx Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group Ten and NGEx Minerals
The main advantage of trading using opposite Group Ten and NGEx Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group Ten position performs unexpectedly, NGEx Minerals 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 NGEx Minerals will offset losses from the drop in NGEx Minerals' long position.| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |