Correlation Between Nuinsco Resources and Jervois Mining

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

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

Diversification Opportunities for Nuinsco Resources and Jervois Mining

0.25

Correlation Coefficient

Nuinsco Resources  Jervois Mining

Modest diversification

The 3 months correlation between Nuinsco and Jervois is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nuinsco Resources Limited and Jervois Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jervois Mining and Nuinsco Resources 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 Nuinsco Resources Limited are associated (or correlated) with Jervois Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jervois Mining has no effect on the direction of Nuinsco Resources i.e., Nuinsco Resources and Jervois Mining go up and down completely randomly.

Pair Corralation between Nuinsco Resources and Jervois Mining

Assuming the 90 days horizon Nuinsco Resources Limited is expected to generate 9.48 times more return on investment than Jervois Mining. However, Nuinsco Resources is 9.48 times more volatile than Jervois Mining. It trades about 0.04 of its potential returns per unit of risk. Jervois Mining is currently generating about 0.08 per unit of risk. If you would invest  0.48  in Nuinsco Resources Limited on December 29, 2024 and sell it today you would lose (0.15) from holding Nuinsco Resources Limited or give up 31.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Nuinsco Resources Limited  vs.  Jervois Mining

Nuinsco Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuinsco Resources Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Nuinsco Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Jervois Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jervois Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Jervois Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nuinsco Resources and Jervois Mining

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

The idea behind Nuinsco Resources Limited and Jervois 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.

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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.