Correlation Between JNC Resources and Tonogold Resources

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

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

Diversification Opportunities for JNC Resources and Tonogold Resources

-0.23

Correlation Coefficient

JNC Resources  Tonogold Resources

Very good diversification

The 3 months correlation between JNC and Tonogold is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding JNC Resources and Tonogold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonogold Resources and JNC Resources 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 JNC Resources are associated (or correlated) with Tonogold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonogold Resources has no effect on the direction of JNC Resources i.e., JNC Resources and Tonogold Resources go up and down completely randomly.

Pair Corralation between JNC Resources and Tonogold Resources

Assuming the 90 days horizon JNC Resources is expected to generate 1.22 times more return on investment than Tonogold Resources. However, JNC Resources is 1.22 times more volatile than Tonogold Resources. It trades about 0.1 of its potential returns per unit of risk. Tonogold Resources is currently generating about 0.11 per unit of risk. If you would invest  1.70  in JNC Resources on October 9, 2024 and sell it today you would earn a total of  0.10  from holding JNC Resources or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

JNC Resources  vs.  Tonogold Resources

JNC Resources

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JNC Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, JNC Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Tonogold Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tonogold Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Tonogold Resources disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JNC Resources and Tonogold Resources

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

The idea behind JNC Resources and Tonogold Resources 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.