Correlation Between Rogers Communications and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Rogers Communications 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 Rogers Communications and NeXGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rogers Communications and NeXGold Mining Corp, you can compare the effects of market volatilities on Rogers Communications 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 Rogers Communications with a short position of NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers Communications and NeXGold Mining.
Diversification Opportunities for Rogers Communications and NeXGold Mining
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rogers and NeXGold is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications 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 Rogers Communications 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 Rogers Communications 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 Rogers Communications i.e., Rogers Communications and NeXGold Mining go up and down completely randomly.
Pair Corralation between Rogers Communications and NeXGold Mining
Assuming the 90 days trading horizon Rogers Communications is expected to under-perform the NeXGold Mining. But the stock apears to be less risky and, when comparing its historical volatility, Rogers Communications is 1.79 times less risky than NeXGold Mining. The stock trades about -0.15 of its potential returns per unit of risk. The NeXGold Mining Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 75.00 in NeXGold Mining Corp on September 12, 2024 and sell it today you would lose (4.00) from holding NeXGold Mining Corp or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rogers Communications vs. NeXGold Mining Corp
Performance |
| Timeline |
| Rogers Communications |
| NeXGold Mining Corp |
Rogers Communications and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rogers Communications and NeXGold Mining
The main advantage of trading using opposite Rogers Communications and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Communications 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.| Rogers Communications vs. Berkshire Hathaway CDR | Rogers Communications vs. Microsoft Corp CDR | Rogers Communications vs. Apple Inc CDR | Rogers Communications vs. Alphabet Inc CDR |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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