Correlation Between Mineros SA and NV Gold

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

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

Diversification Opportunities for Mineros SA and NV Gold

-0.67

Correlation Coefficient

Mineros SA  NV Gold

Excellent diversification

The 3 months correlation between Mineros and NVX is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mineros SA and NV Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Gold Corp and Mineros SA 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 Mineros SA are associated (or correlated) with NV Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Gold Corp has no effect on the direction of Mineros SA i.e., Mineros SA and NV Gold go up and down completely randomly.

Pair Corralation between Mineros SA and NV Gold

Assuming the 90 days trading horizon Mineros SA is expected to generate 1.43 times less return on investment than NV Gold. But when comparing it to its historical volatility, Mineros SA is 1.19 times less risky than NV Gold. It trades about 0.14 of its potential returns per unit of risk. NV Gold Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  19.00  in NV Gold Corp on October 23, 2024 and sell it today you would earn a total of  2.00  from holding NV Gold Corp or generate 10.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Mineros SA  vs.  NV Gold Corp

Mineros SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mineros SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Mineros SA displayed solid returns over the last few months and may actually be approaching a breakup point.

NV Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NV Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Mineros SA and NV Gold

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

The idea behind Mineros SA and NV Gold Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.