Correlation Between NV Gold and Kesselrun Resources

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

Diversification Opportunities for NV Gold and Kesselrun Resources

0.6

Correlation Coefficient

NV Gold  Kesselrun Resources

Poor diversification

The 3 months correlation between NVX and Kesselrun is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NV Gold Corp and Kesselrun Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesselrun Resources 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 Kesselrun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesselrun Resources has no effect on the direction of NV Gold i.e., NV Gold and Kesselrun Resources go up and down completely randomly.

Pair Corralation between NV Gold and Kesselrun Resources

Assuming the 90 days horizon NV Gold Corp is expected to under-perform the Kesselrun Resources. But the stock apears to be less risky and, when comparing its historical volatility, NV Gold Corp is 1.54 times less risky than Kesselrun Resources. The stock trades about -0.06 of its potential returns per unit of risk. The Kesselrun Resources is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Kesselrun Resources on October 23, 2024 and sell it today you would lose (1.50) from holding Kesselrun Resources or give up 30.0% of portfolio value over 90 days.

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

NV Gold Corp  vs.  Kesselrun Resources

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.

Kesselrun Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kesselrun Resources 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.

Pair Trading with NV Gold and Kesselrun Resources

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

The idea behind NV Gold Corp and Kesselrun Resources 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.