Correlation Between CNJ Capital and Nortec Minerals

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

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

Diversification Opportunities for CNJ Capital and Nortec Minerals

0.0

Correlation Coefficient

CNJ Capital  Nortec Minerals

Pay attention - limited upside

The 3 months correlation between CNJ and Nortec is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNJ Capital Investments and Nortec Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nortec Minerals Corp and CNJ Capital 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 CNJ Capital Investments are associated (or correlated) with Nortec Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nortec Minerals Corp has no effect on the direction of CNJ Capital i.e., CNJ Capital and Nortec Minerals go up and down completely randomly.

Pair Corralation between CNJ Capital and Nortec Minerals

If you would invest  2.00  in Nortec Minerals Corp on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Nortec Minerals Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

CNJ Capital Investments  vs.  Nortec Minerals Corp

CNJ Capital Investments

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nortec Minerals Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nortec Minerals Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nortec Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CNJ Capital and Nortec Minerals

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

The idea behind CNJ Capital Investments and Nortec Minerals 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.