Correlation Between Richelieu Hardware and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Richelieu Hardware and NeXGold 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 Richelieu Hardware and NeXGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richelieu Hardware and NeXGold Mining Corp, you can compare the effects of market volatilities on Richelieu Hardware and NeXGold 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 Richelieu Hardware with a short position of NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richelieu Hardware and NeXGold Mining.
Diversification Opportunities for Richelieu Hardware and NeXGold Mining
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Richelieu and NeXGold is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Richelieu Hardware and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold Mining Corp and Richelieu Hardware 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 Richelieu Hardware are associated (or correlated) with NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of Richelieu Hardware i.e., Richelieu Hardware and NeXGold Mining go up and down completely randomly.
Pair Corralation between Richelieu Hardware and NeXGold Mining
Assuming the 90 days trading horizon Richelieu Hardware is expected to generate 0.66 times more return on investment than NeXGold Mining. However, Richelieu Hardware is 1.51 times less risky than NeXGold Mining. It trades about 0.03 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about 0.01 per unit of risk. If you would invest 3,898 in Richelieu Hardware on November 8, 2024 and sell it today you would earn a total of 39.00 from holding Richelieu Hardware or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Richelieu Hardware vs. NeXGold Mining Corp
Performance |
| Timeline |
| Richelieu Hardware |
| NeXGold Mining Corp |
Richelieu Hardware and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richelieu Hardware and NeXGold Mining
The main advantage of trading using opposite Richelieu Hardware and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richelieu Hardware position performs unexpectedly, NeXGold 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 NeXGold Mining will offset losses from the drop in NeXGold Mining's long position.| Richelieu Hardware vs. Stella Jones | Richelieu Hardware vs. Winpak | Richelieu Hardware vs. Stantec | Richelieu Hardware vs. Gildan Activewear |
| NeXGold Mining vs. Newmont Goldcorp Corp | NeXGold Mining vs. Agnico Eagle Mines | NeXGold Mining vs. Barrick Gold Corp | NeXGold Mining vs. Wheaton Precious Metals |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |