Correlation Between Nevada King and Thesis Gold

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

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

Diversification Opportunities for Nevada King and Thesis Gold

0.88

Correlation Coefficient

Nevada King  Thesis Gold

Very poor diversification

The 3 months correlation between Nevada and Thesis is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nevada King Gold and Thesis Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thesis Gold and Nevada King 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 Nevada King Gold are associated (or correlated) with Thesis Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thesis Gold has no effect on the direction of Nevada King i.e., Nevada King and Thesis Gold go up and down completely randomly.

Pair Corralation between Nevada King and Thesis Gold

Assuming the 90 days horizon Nevada King Gold is expected to under-perform the Thesis Gold. In addition to that, Nevada King is 1.08 times more volatile than Thesis Gold. It trades about -0.08 of its total potential returns per unit of risk. Thesis Gold is currently generating about -0.05 per unit of volatility. If you would invest  82.00  in Thesis Gold on September 13, 2024 and sell it today you would lose (13.00) from holding Thesis Gold or give up 15.85% of portfolio value over 90 days.

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

Nevada King Gold  vs.  Thesis Gold

Nevada King Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nevada King 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.

Thesis Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thesis Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Nevada King and Thesis Gold

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

The idea behind Nevada King Gold and Thesis 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.