Correlation Between Pinetree Capital and NXG NextGen
Can any of the company-specific risk be diversified away by investing in both Pinetree Capital and NXG NextGen 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 Pinetree Capital and NXG NextGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinetree Capital and NXG NextGen Infrastructure, you can compare the effects of market volatilities on Pinetree Capital and NXG NextGen 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 Pinetree Capital with a short position of NXG NextGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinetree Capital and NXG NextGen.
Diversification Opportunities for Pinetree Capital and NXG NextGen
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pinetree and NXG is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pinetree Capital and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr and Pinetree Capital 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 Pinetree Capital are associated (or correlated) with NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of Pinetree Capital i.e., Pinetree Capital and NXG NextGen go up and down completely randomly.
Pair Corralation between Pinetree Capital and NXG NextGen
Assuming the 90 days horizon Pinetree Capital is expected to generate 1.3 times more return on investment than NXG NextGen. However, Pinetree Capital is 1.3 times more volatile than NXG NextGen Infrastructure. It trades about 0.09 of its potential returns per unit of risk. NXG NextGen Infrastructure is currently generating about 0.07 per unit of risk. If you would invest 278.00 in Pinetree Capital on August 31, 2024 and sell it today you would earn a total of 463.00 from holding Pinetree Capital or generate 166.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.56% |
| Values | Daily Returns |
Pinetree Capital vs. NXG NextGen Infrastructure
Performance |
| Timeline |
| Pinetree Capital |
| NXG NextGen Infrastr |
Pinetree Capital and NXG NextGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinetree Capital and NXG NextGen
The main advantage of trading using opposite Pinetree Capital and NXG NextGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinetree Capital position performs unexpectedly, NXG NextGen 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 NXG NextGen will offset losses from the drop in NXG NextGen's long position.| Pinetree Capital vs. SPENN Technology AS | Pinetree Capital vs. OFX Group Ltd | Pinetree Capital vs. GreenBank Capital | Pinetree Capital vs. Arcane Crypto AB |
| NXG NextGen vs. MFS Investment Grade | NXG NextGen vs. Invesco High Income | NXG NextGen vs. Eaton Vance National | NXG NextGen vs. Nuveen California Select |
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.
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