Correlation Between CGX Energy and Nobel29 Resources

Can any of the company-specific risk be diversified away by investing in both CGX Energy and Nobel29 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 CGX Energy and Nobel29 Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CGX Energy and Nobel29 Resources Corp, you can compare the effects of market volatilities on CGX Energy and Nobel29 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 CGX Energy with a short position of Nobel29 Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGX Energy and Nobel29 Resources.

Diversification Opportunities for CGX Energy and Nobel29 Resources

-0.4

Correlation Coefficient

CGX Energy  Nobel29 Resources

Very good diversification

The 3 months correlation between CGX and Nobel29 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CGX Energy and Nobel29 Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nobel29 Resources Corp and CGX Energy 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 CGX Energy are associated (or correlated) with Nobel29 Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nobel29 Resources Corp has no effect on the direction of CGX Energy i.e., CGX Energy and Nobel29 Resources go up and down completely randomly.

Pair Corralation between CGX Energy and Nobel29 Resources

Assuming the 90 days horizon CGX Energy is expected to generate 0.95 times more return on investment than Nobel29 Resources. However, CGX Energy is 1.06 times less risky than Nobel29 Resources. It trades about 0.02 of its potential returns per unit of risk. Nobel29 Resources Corp is currently generating about 0.0 per unit of risk. If you would invest  15.00  in CGX Energy on October 10, 2024 and sell it today you would lose (1.00) from holding CGX Energy or give up 6.67% of portfolio value over 90 days.

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

CGX Energy  vs.  Nobel29 Resources Corp

CGX Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CGX Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CGX Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Nobel29 Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nobel29 Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Nobel29 Resources is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CGX Energy and Nobel29 Resources

The main advantage of trading using opposite CGX Energy and Nobel29 Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGX Energy position performs unexpectedly, Nobel29 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 Nobel29 Resources will offset losses from the drop in Nobel29 Resources' long position.

The idea behind CGX Energy and Nobel29 Resources 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.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .