Correlation Between NeXGold Mining and Western Copper

Can any of the company-specific risk be diversified away by investing in both NeXGold Mining and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on NeXGold Mining and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Western Copper.

Diversification Opportunities for NeXGold Mining and Western Copper

0.35

Correlation Coefficient

NeXGold Mining  Western Copper

Weak diversification

The 3 months correlation between NeXGold and Western is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and Western Copper go up and down completely randomly.

Pair Corralation between NeXGold Mining and Western Copper

Assuming the 90 days trading horizon NeXGold Mining Corp is expected to generate 1.61 times more return on investment than Western Copper. However, NeXGold Mining is 1.61 times more volatile than Western Copper and. It trades about -0.01 of its potential returns per unit of risk. Western Copper and is currently generating about -0.02 per unit of risk. If you would invest  128.00  in NeXGold Mining Corp on September 20, 2024 and sell it today you would lose (59.00) from holding NeXGold Mining Corp or give up 46.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

NeXGold Mining Corp  vs.  Western Copper and

NeXGold Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Western Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Copper and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with NeXGold Mining and Western Copper

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

The idea behind NeXGold Mining Corp and Western Copper and 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.