Correlation Between Nobel29 Resources and CGX Energy

Can any of the company-specific risk be diversified away by investing in both Nobel29 Resources and CGX Energy 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 Nobel29 Resources and CGX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nobel29 Resources Corp and CGX Energy, you can compare the effects of market volatilities on Nobel29 Resources and CGX Energy 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 Nobel29 Resources with a short position of CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nobel29 Resources and CGX Energy.

Diversification Opportunities for Nobel29 Resources and CGX Energy

-0.18

Correlation Coefficient

Nobel29 Resources  CGX Energy

Good diversification

The 3 months correlation between Nobel29 and CGX is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nobel29 Resources Corp and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy and Nobel29 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 Nobel29 Resources Corp are associated (or correlated) with CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Nobel29 Resources i.e., Nobel29 Resources and CGX Energy go up and down completely randomly.

Pair Corralation between Nobel29 Resources and CGX Energy

Assuming the 90 days trading horizon Nobel29 Resources Corp is expected to generate 1.21 times more return on investment than CGX Energy. However, Nobel29 Resources is 1.21 times more volatile than CGX Energy. It trades about 0.01 of its potential returns per unit of risk. CGX Energy is currently generating about 0.0 per unit of risk. If you would invest  5.00  in Nobel29 Resources Corp on October 24, 2024 and sell it today you would lose (0.50) from holding Nobel29 Resources Corp or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nobel29 Resources Corp  vs.  CGX Energy

Nobel29 Resources Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nobel29 Resources Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Nobel29 Resources may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CGX Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CGX Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CGX Energy is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nobel29 Resources and CGX Energy

The main advantage of trading using opposite Nobel29 Resources and CGX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nobel29 Resources position performs unexpectedly, CGX Energy 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 CGX Energy will offset losses from the drop in CGX Energy's long position.

The idea behind Nobel29 Resources Corp and CGX Energy 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.