Correlation Between NV Gold and Brookfield

Can any of the company-specific risk be diversified away by investing in both NV Gold and Brookfield 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 Brookfield 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 Brookfield, you can compare the effects of market volatilities on NV Gold and Brookfield 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 Brookfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of NV Gold and Brookfield.

Diversification Opportunities for NV Gold and Brookfield

-0.8

Correlation Coefficient

NV Gold  Brookfield

Pay attention - limited upside

The 3 months correlation between NVX and Brookfield is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding NV Gold Corp and Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield 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 Brookfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield has no effect on the direction of NV Gold i.e., NV Gold and Brookfield go up and down completely randomly.

Pair Corralation between NV Gold and Brookfield

Assuming the 90 days horizon NV Gold Corp is expected to under-perform the Brookfield. In addition to that, NV Gold is 9.2 times more volatile than Brookfield. It trades about -0.02 of its total potential returns per unit of risk. Brookfield is currently generating about 0.19 per unit of volatility. If you would invest  2,300  in Brookfield on October 8, 2024 and sell it today you would earn a total of  192.00  from holding Brookfield or generate 8.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

NV Gold Corp  vs.  Brookfield

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 latest abnormal 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.

Brookfield

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Brookfield may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with NV Gold and Brookfield

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

The idea behind NV Gold Corp and Brookfield 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.