Correlation Between Timbercreek Financial and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Timbercreek Financial 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 Timbercreek Financial and NeXGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timbercreek Financial Corp and NeXGold Mining Corp, you can compare the effects of market volatilities on Timbercreek Financial 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 Timbercreek Financial with a short position of NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timbercreek Financial and NeXGold Mining.
Diversification Opportunities for Timbercreek Financial and NeXGold Mining
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Timbercreek and NeXGold is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Timbercreek Financial Corp 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 Timbercreek Financial 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 Timbercreek Financial Corp 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 Timbercreek Financial i.e., Timbercreek Financial and NeXGold Mining go up and down completely randomly.
Pair Corralation between Timbercreek Financial and NeXGold Mining
Assuming the 90 days horizon Timbercreek Financial Corp is expected to generate 0.29 times more return on investment than NeXGold Mining. However, Timbercreek Financial Corp is 3.43 times less risky than NeXGold Mining. It trades about 0.09 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about -0.05 per unit of risk. If you would invest 679.00 in Timbercreek Financial Corp on September 2, 2024 and sell it today you would earn a total of 86.00 from holding Timbercreek Financial Corp or generate 12.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Timbercreek Financial Corp vs. NeXGold Mining Corp
Performance |
| Timeline |
| Timbercreek Financial |
| NeXGold Mining Corp |
Timbercreek Financial and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timbercreek Financial and NeXGold Mining
The main advantage of trading using opposite Timbercreek Financial and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timbercreek Financial 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.| Timbercreek Financial vs. Firm Capital Mortgage | Timbercreek Financial vs. MCAN Mortgage | Timbercreek Financial vs. First National Financial | Timbercreek Financial vs. Bridgemarq Real Estate |
| NeXGold Mining vs. Royal Bank of | NeXGold Mining vs. Canso Credit Trust | NeXGold Mining vs. CI Financial Corp | NeXGold Mining vs. Olympia Financial Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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