Correlation Between Northstar Clean and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Northstar Clean 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 Northstar Clean and NeXGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northstar Clean Technologies and NeXGold Mining Corp, you can compare the effects of market volatilities on Northstar Clean 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 Northstar Clean with a short position of NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and NeXGold Mining.
Diversification Opportunities for Northstar Clean and NeXGold Mining
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northstar and NeXGold is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies 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 Northstar Clean 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 Northstar Clean Technologies 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 Northstar Clean i.e., Northstar Clean and NeXGold Mining go up and down completely randomly.
Pair Corralation between Northstar Clean and NeXGold Mining
Assuming the 90 days trading horizon Northstar Clean Technologies is expected to generate 1.4 times more return on investment than NeXGold Mining. However, Northstar Clean is 1.4 times more volatile than NeXGold Mining Corp. It trades about 0.15 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about -0.36 per unit of risk. If you would invest 25.00 in Northstar Clean Technologies on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Northstar Clean Technologies or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northstar Clean Technologies vs. NeXGold Mining Corp
Performance |
| Timeline |
| Northstar Clean Tech |
| NeXGold Mining Corp |
Northstar Clean and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and NeXGold Mining
The main advantage of trading using opposite Northstar Clean and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean 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.The idea behind Northstar Clean Technologies and NeXGold Mining Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NeXGold Mining vs. Ocumetics Technology Corp | NeXGold Mining vs. Cogeco Communications | NeXGold Mining vs. Wishpond Technologies | NeXGold Mining vs. Oculus VisionTech |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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