Correlation Between Loncor Gold and Nighthawk Gold

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

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

Diversification Opportunities for Loncor Gold and Nighthawk Gold

0.11

Correlation Coefficient

Loncor Gold  Nighthawk Gold

Average diversification

The 3 months correlation between Loncor and Nighthawk is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Loncor Gold and Nighthawk Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nighthawk Gold Corp and Loncor 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 Loncor Gold are associated (or correlated) with Nighthawk Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nighthawk Gold Corp has no effect on the direction of Loncor Gold i.e., Loncor Gold and Nighthawk Gold go up and down completely randomly.

Pair Corralation between Loncor Gold and Nighthawk Gold

If you would invest  41.00  in Nighthawk Gold Corp on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Nighthawk Gold Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Loncor Gold  vs.  Nighthawk Gold Corp

Loncor Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loncor Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Loncor Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nighthawk Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nighthawk Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nighthawk Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Loncor Gold and Nighthawk Gold

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

The idea behind Loncor Gold and Nighthawk Gold 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.