Correlation Between NEXA RESOURCES and WOLFDEN RES
Can any of the company-specific risk be diversified away by investing in both NEXA RESOURCES and WOLFDEN RES 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 NEXA RESOURCES and WOLFDEN RES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXA RESOURCES SA and WOLFDEN RES P, you can compare the effects of market volatilities on NEXA RESOURCES and WOLFDEN RES 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 NEXA RESOURCES with a short position of WOLFDEN RES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXA RESOURCES and WOLFDEN RES.
Diversification Opportunities for NEXA RESOURCES and WOLFDEN RES
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NEXA and WOLFDEN is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding NEXA RESOURCES SA and WOLFDEN RES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOLFDEN RES P and NEXA RESOURCES 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 NEXA RESOURCES SA are associated (or correlated) with WOLFDEN RES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOLFDEN RES P has no effect on the direction of NEXA RESOURCES i.e., NEXA RESOURCES and WOLFDEN RES go up and down completely randomly.
Pair Corralation between NEXA RESOURCES and WOLFDEN RES
Assuming the 90 days horizon NEXA RESOURCES is expected to generate 22.29 times less return on investment than WOLFDEN RES. But when comparing it to its historical volatility, NEXA RESOURCES SA is 30.96 times less risky than WOLFDEN RES. It trades about 0.18 of its potential returns per unit of risk. WOLFDEN RES P is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2.00 in WOLFDEN RES P on September 24, 2024 and sell it today you would earn a total of 0.70 from holding WOLFDEN RES P or generate 35.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NEXA RESOURCES SA vs. WOLFDEN RES P
Performance |
Timeline |
NEXA RESOURCES SA |
WOLFDEN RES P |
NEXA RESOURCES and WOLFDEN RES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NEXA RESOURCES and WOLFDEN RES
The main advantage of trading using opposite NEXA RESOURCES and WOLFDEN RES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXA RESOURCES position performs unexpectedly, WOLFDEN RES 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 WOLFDEN RES will offset losses from the drop in WOLFDEN RES's long position.NEXA RESOURCES vs. Rio Tinto Group | NEXA RESOURCES vs. Anglo American plc | NEXA RESOURCES vs. Liontown Resources Limited | NEXA RESOURCES vs. STRAITS TRADG SD |
WOLFDEN RES vs. Rio Tinto Group | WOLFDEN RES vs. Anglo American plc | WOLFDEN RES vs. Liontown Resources Limited | WOLFDEN RES vs. NEXA RESOURCES SA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |