Correlation Between Nsx and Galena Mining

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

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

Diversification Opportunities for Nsx and Galena Mining

0.0

Correlation Coefficient

Nsx  Galena Mining

Pay attention - limited upside

The 3 months correlation between Nsx and Galena is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nsx and Galena Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galena Mining and Nsx 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 Nsx are associated (or correlated) with Galena Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galena Mining has no effect on the direction of Nsx i.e., Nsx and Galena Mining go up and down completely randomly.

Pair Corralation between Nsx and Galena Mining

Assuming the 90 days trading horizon Nsx is expected to generate 1.23 times more return on investment than Galena Mining. However, Nsx is 1.23 times more volatile than Galena Mining. It trades about -0.02 of its potential returns per unit of risk. Galena Mining is currently generating about -0.05 per unit of risk. If you would invest  7.70  in Nsx on October 4, 2024 and sell it today you would lose (5.40) from holding Nsx or give up 70.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nsx  vs.  Galena Mining

Nsx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nsx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nsx is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Galena Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galena Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Galena Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nsx and Galena Mining

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

The idea behind Nsx and Galena Mining 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.