Correlation Between Major Drilling and NGEx Minerals

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

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

Diversification Opportunities for Major Drilling and NGEx Minerals

0.0

Correlation Coefficient

Major Drilling  NGEx Minerals

Pay attention - limited upside

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

Pair Corralation between Major Drilling and NGEx Minerals

If you would invest  0.00  in NGEx Minerals on December 20, 2024 and sell it today you would earn a total of  0.00  from holding NGEx Minerals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Major Drilling Group  vs.  NGEx Minerals

Major Drilling Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Major Drilling Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Major Drilling is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

NGEx Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days NGEx Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, NGEx Minerals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Major Drilling and NGEx Minerals

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

The idea behind Major Drilling Group and NGEx Minerals 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 CEOs Directory module to screen CEOs from public companies around the world.