Correlation Between Nevada King and Thesis Gold

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

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

Diversification Opportunities for Nevada King and Thesis Gold

-0.56

Correlation Coefficient

Nevada King  Thesis Gold

Excellent diversification

The 3 months correlation between Nevada and Thesis is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nevada King Gold and Thesis Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thesis Gold and Nevada King 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 Nevada King Gold are associated (or correlated) with Thesis Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thesis Gold has no effect on the direction of Nevada King i.e., Nevada King and Thesis Gold go up and down completely randomly.

Pair Corralation between Nevada King and Thesis Gold

Assuming the 90 days horizon Nevada King is expected to generate 10.8 times less return on investment than Thesis Gold. But when comparing it to its historical volatility, Nevada King Gold is 1.13 times less risky than Thesis Gold. It trades about 0.02 of its potential returns per unit of risk. Thesis Gold is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  56.00  in Thesis Gold on December 29, 2024 and sell it today you would earn a total of  32.00  from holding Thesis Gold or generate 57.14% return on investment over 90 days.

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

Nevada King Gold  vs.  Thesis Gold

Nevada King Gold

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nevada King Gold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Nevada King is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Thesis Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thesis Gold are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Thesis Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nevada King and Thesis Gold

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

The idea behind Nevada King Gold and Thesis Gold 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.