Correlation Between Dividend and New Found

Can any of the company-specific risk be diversified away by investing in both Dividend and New Found 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 Dividend and New Found into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dividend 15 Split and New Found Gold, you can compare the effects of market volatilities on Dividend and New Found 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 Dividend with a short position of New Found. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dividend and New Found.

Diversification Opportunities for Dividend and New Found

-0.72

Correlation Coefficient

Dividend  New Found

Pay attention - limited upside

The 3 months correlation between Dividend and New is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dividend 15 Split and New Found Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Found Gold and Dividend 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 Dividend 15 Split are associated (or correlated) with New Found. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Found Gold has no effect on the direction of Dividend i.e., Dividend and New Found go up and down completely randomly.

Pair Corralation between Dividend and New Found

Assuming the 90 days trading horizon Dividend 15 Split is expected to generate 0.34 times more return on investment than New Found. However, Dividend 15 Split is 2.96 times less risky than New Found. It trades about 0.14 of its potential returns per unit of risk. New Found Gold is currently generating about -0.1 per unit of risk. If you would invest  567.00  in Dividend 15 Split on September 29, 2024 and sell it today you would earn a total of  65.00  from holding Dividend 15 Split or generate 11.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Dividend 15 Split  vs.  New Found Gold

Dividend 15 Split

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

New Found Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Found Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Dividend and New Found

The main advantage of trading using opposite Dividend and New Found positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dividend position performs unexpectedly, New Found 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 Found will offset losses from the drop in New Found's long position.

The idea behind Dividend 15 Split and New Found Gold 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.