Correlation Between NV Gold and Blue Star

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

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

Diversification Opportunities for NV Gold and Blue Star

0.51

Correlation Coefficient

NV Gold  Blue Star

Very weak diversification

The 3 months correlation between NVX and Blue is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding NV Gold Corp and Blue Star Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Star Gold and NV 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 NV Gold Corp are associated (or correlated) with Blue Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Star Gold has no effect on the direction of NV Gold i.e., NV Gold and Blue Star go up and down completely randomly.

Pair Corralation between NV Gold and Blue Star

Assuming the 90 days horizon NV Gold Corp is expected to under-perform the Blue Star. In addition to that, NV Gold is 1.09 times more volatile than Blue Star Gold. It trades about -0.06 of its total potential returns per unit of risk. Blue Star Gold is currently generating about -0.03 per unit of volatility. If you would invest  6.00  in Blue Star Gold on October 23, 2024 and sell it today you would lose (1.00) from holding Blue Star Gold or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

NV Gold Corp  vs.  Blue Star Gold

NV Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NV Gold Corp 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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Blue Star Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Star Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with NV Gold and Blue Star

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

The idea behind NV Gold Corp and Blue Star 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..