Correlation Between Defiance Silver and Nulegacy Gold

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

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

Diversification Opportunities for Defiance Silver and Nulegacy Gold

0.0

Correlation Coefficient

Defiance Silver  Nulegacy Gold

Pay attention - limited upside

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

Pair Corralation between Defiance Silver and Nulegacy Gold

If you would invest  19.00  in Defiance Silver Corp on December 22, 2024 and sell it today you would earn a total of  8.00  from holding Defiance Silver Corp or generate 42.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Defiance Silver Corp  vs.  Nulegacy Gold

Defiance Silver Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Defiance Silver Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Defiance Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Nulegacy Gold

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Defiance Silver and Nulegacy Gold

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

The idea behind Defiance Silver Corp and Nulegacy 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.