Correlation Between SPACE and Newcore Gold

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

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

Diversification Opportunities for SPACE and Newcore Gold

-0.5

Correlation Coefficient

SPACE  Newcore Gold

Very good diversification

The 3 months correlation between SPACE and Newcore is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Newcore Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcore Gold and SPACE 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 SPACE are associated (or correlated) with Newcore Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcore Gold has no effect on the direction of SPACE i.e., SPACE and Newcore Gold go up and down completely randomly.

Pair Corralation between SPACE and Newcore Gold

Assuming the 90 days horizon SPACE is expected to generate 1.31 times more return on investment than Newcore Gold. However, SPACE is 1.31 times more volatile than Newcore Gold. It trades about 0.13 of its potential returns per unit of risk. Newcore Gold is currently generating about 0.0 per unit of risk. If you would invest  35.00  in SPACE on September 12, 2024 and sell it today you would earn a total of  15.00  from holding SPACE or generate 42.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

SPACE  vs.  Newcore Gold

SPACE

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SPACE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Newcore Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newcore Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Newcore Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SPACE and Newcore Gold

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

The idea behind SPACE and Newcore 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.