Correlation Between CDN Maverick and NGEx Minerals

Can any of the company-specific risk be diversified away by investing in both CDN Maverick and NGEx Minerals 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 CDN Maverick and NGEx Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CDN Maverick Capital and NGEx Minerals, you can compare the effects of market volatilities on CDN Maverick and NGEx Minerals 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 CDN Maverick with a short position of NGEx Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN Maverick and NGEx Minerals.

Diversification Opportunities for CDN Maverick and NGEx Minerals

0.33

Correlation Coefficient

CDN Maverick  NGEx Minerals

Weak diversification

The 3 months correlation between CDN and NGEx is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CDN Maverick Capital and NGEx Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGEx Minerals and CDN Maverick 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 CDN Maverick Capital are associated (or correlated) with NGEx Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGEx Minerals has no effect on the direction of CDN Maverick i.e., CDN Maverick and NGEx Minerals go up and down completely randomly.

Pair Corralation between CDN Maverick and NGEx Minerals

Assuming the 90 days horizon CDN Maverick Capital is expected to generate 5.32 times more return on investment than NGEx Minerals. However, CDN Maverick is 5.32 times more volatile than NGEx Minerals. It trades about 0.1 of its potential returns per unit of risk. NGEx Minerals is currently generating about 0.05 per unit of risk. If you would invest  8.00  in CDN Maverick Capital on December 27, 2024 and sell it today you would earn a total of  4.00  from holding CDN Maverick Capital or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

CDN Maverick Capital  vs.  NGEx Minerals

CDN Maverick Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CDN Maverick Capital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, CDN Maverick reported solid returns over the last few months and may actually be approaching a breakup point.

NGEx Minerals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NGEx Minerals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NGEx Minerals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CDN Maverick and NGEx Minerals

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

The idea behind CDN Maverick Capital and NGEx Minerals 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..