Correlation Between Nexus Gold and Maritime Resources

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

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

Diversification Opportunities for Nexus Gold and Maritime Resources

-0.27

Correlation Coefficient

Nexus Gold  Maritime Resources

Very good diversification

The 3 months correlation between Nexus and Maritime is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nexus Gold Corp and Maritime Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maritime Resources Corp and Nexus 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 Nexus Gold Corp are associated (or correlated) with Maritime Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maritime Resources Corp has no effect on the direction of Nexus Gold i.e., Nexus Gold and Maritime Resources go up and down completely randomly.

Pair Corralation between Nexus Gold and Maritime Resources

If you would invest  2.89  in Maritime Resources Corp on September 4, 2024 and sell it today you would earn a total of  2.97  from holding Maritime Resources Corp or generate 102.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Nexus Gold Corp  vs.  Maritime Resources Corp

Nexus Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexus Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Nexus Gold is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Maritime Resources Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maritime Resources Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Maritime Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexus Gold and Maritime Resources

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

The idea behind Nexus Gold Corp and Maritime Resources Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.