Correlation Between Nulegacy Gold and Falcon Gold

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

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

Diversification Opportunities for Nulegacy Gold and Falcon Gold

-0.1

Correlation Coefficient

Nulegacy Gold  Falcon Gold

Good diversification

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

Pair Corralation between Nulegacy Gold and Falcon Gold

Assuming the 90 days horizon Nulegacy Gold is expected to under-perform the Falcon Gold. But the stock apears to be less risky and, when comparing its historical volatility, Nulegacy Gold is 1.75 times less risky than Falcon Gold. The stock trades about -0.13 of its potential returns per unit of risk. The Falcon Gold Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Falcon Gold Corp on December 21, 2024 and sell it today you would earn a total of  1.00  from holding Falcon Gold Corp or generate 40.0% return on investment over 90 days.

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

Nulegacy Gold  vs.  Falcon Gold Corp

Nulegacy Gold

Risk-Adjusted Performance

Very Weak

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

Falcon Gold Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Falcon Gold Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Falcon Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nulegacy Gold and Falcon Gold

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

The idea behind Nulegacy Gold and Falcon Gold Corp 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 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.