Correlation Between Nouveau Monde and Ressources Minieres

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

By analyzing existing cross correlation between Nouveau Monde Graphite and Ressources Minieres Radisson, you can compare the effects of market volatilities on Nouveau Monde and Ressources Minieres 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 Nouveau Monde with a short position of Ressources Minieres. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nouveau Monde and Ressources Minieres.

Diversification Opportunities for Nouveau Monde and Ressources Minieres

0.53

Correlation Coefficient

Nouveau Monde  Ressources Minieres

Very weak diversification

The 3 months correlation between Nouveau and Ressources is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nouveau Monde Graphite and Ressources Minieres Radisson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ressources Minieres and Nouveau Monde 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 Nouveau Monde Graphite are associated (or correlated) with Ressources Minieres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ressources Minieres has no effect on the direction of Nouveau Monde i.e., Nouveau Monde and Ressources Minieres go up and down completely randomly.

Pair Corralation between Nouveau Monde and Ressources Minieres

Assuming the 90 days horizon Nouveau Monde Graphite is expected to under-perform the Ressources Minieres. But the stock apears to be less risky and, when comparing its historical volatility, Nouveau Monde Graphite is 2.39 times less risky than Ressources Minieres. The stock trades about -0.03 of its potential returns per unit of risk. The Ressources Minieres Radisson is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  23.00  in Ressources Minieres Radisson on September 12, 2024 and sell it today you would earn a total of  7.00  from holding Ressources Minieres Radisson or generate 30.43% return on investment over 90 days.

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

Nouveau Monde Graphite  vs.  Ressources Minieres Radisson

Nouveau Monde Graphite

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nouveau Monde Graphite has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Nouveau Monde is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ressources Minieres

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ressources Minieres Radisson are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ressources Minieres showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nouveau Monde and Ressources Minieres

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

The idea behind Nouveau Monde Graphite and Ressources Minieres Radisson 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.