Correlation Between NeXGold Mining and Baselode Energy

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

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

Diversification Opportunities for NeXGold Mining and Baselode Energy

0.18

Correlation Coefficient

NeXGold Mining  Baselode Energy

Average diversification

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

Pair Corralation between NeXGold Mining and Baselode Energy

Assuming the 90 days trading horizon NeXGold Mining is expected to generate 6.9 times less return on investment than Baselode Energy. But when comparing it to its historical volatility, NeXGold Mining Corp is 2.06 times less risky than Baselode Energy. It trades about 0.04 of its potential returns per unit of risk. Baselode Energy Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Baselode Energy Corp on December 24, 2024 and sell it today you would earn a total of  4.00  from holding Baselode Energy Corp or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

NeXGold Mining Corp  vs.  Baselode Energy Corp

NeXGold Mining Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NeXGold Mining Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, NeXGold Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Baselode Energy Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baselode Energy Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Baselode Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NeXGold Mining and Baselode Energy

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

The idea behind NeXGold Mining Corp and Baselode Energy 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.