Correlation Between Mexus Gold and North Bay

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

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

Diversification Opportunities for Mexus Gold and North Bay

0.25

Correlation Coefficient

Mexus Gold  North Bay

Modest diversification

The 3 months correlation between Mexus and North is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mexus Gold Us and North Bay Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Bay Resources and Mexus 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 Mexus Gold Us are associated (or correlated) with North Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Bay Resources has no effect on the direction of Mexus Gold i.e., Mexus Gold and North Bay go up and down completely randomly.

Pair Corralation between Mexus Gold and North Bay

Given the investment horizon of 90 days Mexus Gold Us is expected to generate 8.91 times more return on investment than North Bay. However, Mexus Gold is 8.91 times more volatile than North Bay Resources. It trades about 0.11 of its potential returns per unit of risk. North Bay Resources is currently generating about 0.1 per unit of risk. If you would invest  0.01  in Mexus Gold Us on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Mexus Gold Us or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Mexus Gold Us  vs.  North Bay Resources

Mexus Gold Us

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mexus Gold Us are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Mexus Gold reported solid returns over the last few months and may actually be approaching a breakup point.

North Bay Resources

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in North Bay Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, North Bay demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mexus Gold and North Bay

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

The idea behind Mexus Gold Us and North Bay Resources 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.