Correlation Between Mayfair Gold and NextTrip

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

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

Diversification Opportunities for Mayfair Gold and NextTrip

-0.62

Correlation Coefficient

Mayfair Gold  NextTrip

Excellent diversification

The 3 months correlation between Mayfair and NextTrip is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp and NextTrip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextTrip and Mayfair Gold 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 Mayfair Gold Corp are associated (or correlated) with NextTrip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextTrip has no effect on the direction of Mayfair Gold i.e., Mayfair Gold and NextTrip go up and down completely randomly.

Pair Corralation between Mayfair Gold and NextTrip

Assuming the 90 days horizon Mayfair Gold Corp is expected to generate 0.38 times more return on investment than NextTrip. However, Mayfair Gold Corp is 2.65 times less risky than NextTrip. It trades about -0.13 of its potential returns per unit of risk. NextTrip is currently generating about -0.32 per unit of risk. If you would invest  130.00  in Mayfair Gold Corp on December 4, 2024 and sell it today you would lose (13.00) from holding Mayfair Gold Corp or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Mayfair Gold Corp  vs.  NextTrip

Mayfair Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mayfair Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

NextTrip

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NextTrip are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, NextTrip reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mayfair Gold and NextTrip

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

The idea behind Mayfair Gold Corp and NextTrip 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.