Correlation Between Sixty North and New Guinea
Can any of the company-specific risk be diversified away by investing in both Sixty North and New Guinea 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 Sixty North and New Guinea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixty North Gold and New Guinea Gold, you can compare the effects of market volatilities on Sixty North and New Guinea 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 Sixty North with a short position of New Guinea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixty North and New Guinea.
Diversification Opportunities for Sixty North and New Guinea
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sixty and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sixty North Gold and New Guinea Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Guinea Gold and Sixty North 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 Sixty North Gold are associated (or correlated) with New Guinea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Guinea Gold has no effect on the direction of Sixty North i.e., Sixty North and New Guinea go up and down completely randomly.
Pair Corralation between Sixty North and New Guinea
Assuming the 90 days horizon Sixty North Gold is expected to generate 4.16 times more return on investment than New Guinea. However, Sixty North is 4.16 times more volatile than New Guinea Gold. It trades about 0.08 of its potential returns per unit of risk. New Guinea Gold is currently generating about -0.04 per unit of risk. If you would invest 7.00 in Sixty North Gold on September 4, 2024 and sell it today you would lose (0.28) from holding Sixty North Gold or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sixty North Gold vs. New Guinea Gold
Performance |
| Timeline |
| Sixty North Gold |
| New Guinea Gold |
Sixty North and New Guinea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixty North and New Guinea
The main advantage of trading using opposite Sixty North and New Guinea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixty North position performs unexpectedly, New Guinea 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 New Guinea will offset losses from the drop in New Guinea's long position.| Sixty North vs. Harmony Gold Mining | Sixty North vs. SPACE | Sixty North vs. T Rowe Price | Sixty North vs. Ampleforth |
| New Guinea vs. Endurance Gold | New Guinea vs. Sixty North Gold | New Guinea vs. St James Gold | New Guinea vs. Makara Mining Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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