Correlation Between NGEx Minerals and CDN Maverick

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

By analyzing existing cross correlation between NGEx Minerals and CDN Maverick Capital, you can compare the effects of market volatilities on NGEx Minerals and CDN Maverick 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 NGEx Minerals with a short position of CDN Maverick. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGEx Minerals and CDN Maverick.

Diversification Opportunities for NGEx Minerals and CDN Maverick

0.33

Correlation Coefficient

NGEx Minerals  CDN Maverick

Weak diversification

The 3 months correlation between NGEx and CDN is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding NGEx Minerals and CDN Maverick Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN Maverick Capital and NGEx Minerals 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 NGEx Minerals are associated (or correlated) with CDN Maverick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN Maverick Capital has no effect on the direction of NGEx Minerals i.e., NGEx Minerals and CDN Maverick go up and down completely randomly.

Pair Corralation between NGEx Minerals and CDN Maverick

Assuming the 90 days horizon NGEx Minerals is expected to generate 9.69 times less return on investment than CDN Maverick. But when comparing it to its historical volatility, NGEx Minerals is 5.32 times less risky than CDN Maverick. It trades about 0.05 of its potential returns per unit of risk. CDN Maverick Capital is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  8.00  in CDN Maverick Capital on December 27, 2024 and sell it today you would earn a total of  4.00  from holding CDN Maverick Capital or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

NGEx Minerals  vs.  CDN Maverick Capital

NGEx Minerals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NGEx Minerals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NGEx Minerals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CDN Maverick Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CDN Maverick Capital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, CDN Maverick reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NGEx Minerals and CDN Maverick

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

The idea behind NGEx Minerals and CDN Maverick Capital 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .