Correlation Between NeXGold Mining and Bce
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Bce 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 NeXGold Mining and Bce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NeXGold Mining Corp and Bce Inc Pref, you can compare the effects of market volatilities on NeXGold Mining and Bce 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 NeXGold Mining with a short position of Bce. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Bce.
Diversification Opportunities for NeXGold Mining and Bce
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NeXGold and Bce is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Bce Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bce Inc Pref and NeXGold Mining 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 NeXGold Mining Corp are associated (or correlated) with Bce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bce Inc Pref has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Bce go up and down completely randomly.
Pair Corralation between NeXGold Mining and Bce
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Bce. In addition to that, NeXGold Mining is 3.33 times more volatile than Bce Inc Pref. It trades about -0.12 of its total potential returns per unit of risk. Bce Inc Pref is currently generating about -0.1 per unit of volatility. If you would invest 1,689 in Bce Inc Pref on September 26, 2024 and sell it today you would lose (89.00) from holding Bce Inc Pref or give up 5.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
NeXGold Mining Corp vs. Bce Inc Pref
Performance |
Timeline |
NeXGold Mining Corp |
Bce Inc Pref |
NeXGold Mining and Bce Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NeXGold Mining and Bce
The main advantage of trading using opposite NeXGold Mining and Bce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining position performs unexpectedly, Bce 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 Bce will offset losses from the drop in Bce's long position.NeXGold Mining vs. Goodfood Market Corp | NeXGold Mining vs. Costco Wholesale Corp | NeXGold Mining vs. Dream Industrial Real | NeXGold Mining vs. Rogers Communications |
Bce vs. Globex Mining Enterprises | Bce vs. Millennium Silver Corp | Bce vs. NeXGold Mining Corp | Bce vs. Summa Silver Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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