Correlation Between US Gold and NV Gold
Can any of the company-specific risk be diversified away by investing in both US Gold and NV Gold 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 US Gold and NV Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Gold Corp and NV Gold, you can compare the effects of market volatilities on US Gold and NV Gold 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 US Gold with a short position of NV Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Gold and NV Gold.
Diversification Opportunities for US Gold and NV Gold
Good diversification
The 3 months correlation between USAU and NVGLF is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding US Gold Corp and NV Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Gold and US Gold 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 US Gold Corp are associated (or correlated) with NV Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Gold has no effect on the direction of US Gold i.e., US Gold and NV Gold go up and down completely randomly.
Pair Corralation between US Gold and NV Gold
Given the investment horizon of 90 days US Gold Corp is expected to generate 0.66 times more return on investment than NV Gold. However, US Gold Corp is 1.51 times less risky than NV Gold. It trades about 0.21 of its potential returns per unit of risk. NV Gold is currently generating about -0.15 per unit of risk. If you would invest 577.00 in US Gold Corp on September 12, 2024 and sell it today you would earn a total of 137.00 from holding US Gold Corp or generate 23.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
US Gold Corp vs. NV Gold
Performance |
| Timeline |
| US Gold Corp |
| NV Gold |
US Gold and NV Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Gold and NV Gold
The main advantage of trading using opposite US Gold and NV Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Gold position performs unexpectedly, NV Gold 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 NV Gold will offset losses from the drop in NV Gold's long position.| US Gold vs. Labrador Gold Corp | US Gold vs. Aurion Resources | US Gold vs. Puma Exploration | US Gold vs. Golden Star Resource |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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