Correlation Between Cantex Mine and Nevada King

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

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

Diversification Opportunities for Cantex Mine and Nevada King

-0.77

Correlation Coefficient

Cantex Mine  Nevada King

Pay attention - limited upside

The 3 months correlation between Cantex and Nevada is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and Nevada King Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nevada King Gold and Cantex Mine 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 Cantex Mine Development are associated (or correlated) with Nevada King. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nevada King Gold has no effect on the direction of Cantex Mine i.e., Cantex Mine and Nevada King go up and down completely randomly.

Pair Corralation between Cantex Mine and Nevada King

Assuming the 90 days horizon Cantex Mine is expected to generate 1.3 times less return on investment than Nevada King. In addition to that, Cantex Mine is 1.5 times more volatile than Nevada King Gold. It trades about 0.03 of its total potential returns per unit of risk. Nevada King Gold is currently generating about 0.06 per unit of volatility. If you would invest  18.00  in Nevada King Gold on December 26, 2024 and sell it today you would earn a total of  2.00  from holding Nevada King Gold or generate 11.11% return on investment over 90 days.

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

Cantex Mine Development  vs.  Nevada King Gold

Cantex Mine Development

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cantex Mine Development are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Cantex Mine reported solid returns over the last few months and may actually be approaching a breakup point.

Nevada King Gold

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nevada King Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Nevada King reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cantex Mine and Nevada King

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

The idea behind Cantex Mine Development and Nevada King 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.