Correlation Between Nevada King and NorthIsle Copper

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Can any of the company-specific risk be diversified away by investing in both Nevada King and NorthIsle 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 Nevada King and NorthIsle Copper 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 NorthIsle Copper and, you can compare the effects of market volatilities on Nevada King and NorthIsle 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 Nevada King with a short position of NorthIsle Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nevada King and NorthIsle Copper.

Diversification Opportunities for Nevada King and NorthIsle Copper

NevadaNorthIsleDiversified AwayNevadaNorthIsleDiversified Away100%
0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Nevada and NorthIsle is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nevada King Gold and NorthIsle Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorthIsle Copper 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 NorthIsle Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorthIsle Copper has no effect on the direction of Nevada King i.e., Nevada King and NorthIsle Copper go up and down completely randomly.

Pair Corralation between Nevada King and NorthIsle Copper

Assuming the 90 days horizon Nevada King is expected to generate 3.7 times less return on investment than NorthIsle Copper. In addition to that, Nevada King is 1.37 times more volatile than NorthIsle Copper and. It trades about 0.03 of its total potential returns per unit of risk. NorthIsle Copper and is currently generating about 0.14 per unit of volatility. If you would invest  31.00  in NorthIsle Copper and on November 24, 2024 and sell it today you would earn a total of  11.00  from holding NorthIsle Copper and or generate 35.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Nevada King Gold  vs.  NorthIsle Copper and

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-10010
JavaScript chart by amCharts 3.21.15NKGFF NTCPF
       Timeline  
Nevada King Gold 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nevada King Gold are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Nevada King may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.160.170.180.190.20.210.220.230.24
NorthIsle Copper 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in NorthIsle Copper and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NorthIsle Copper reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.30.350.40.45

Nevada King and NorthIsle Copper Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-18.3-13.7-9.11-4.520.04.439.0913.7518.4123.07 0.0100.0120.0140.0160.0180.0200.022
JavaScript chart by amCharts 3.21.15NKGFF NTCPF
       Returns  

Pair Trading with Nevada King and NorthIsle Copper

The main advantage of trading using opposite Nevada King and NorthIsle Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nevada King position performs unexpectedly, NorthIsle 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 NorthIsle Copper will offset losses from the drop in NorthIsle Copper's long position.
The idea behind Nevada King Gold and NorthIsle 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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