Correlation Between Arizona Metals and NextSource Materials

Can any of the company-specific risk be diversified away by investing in both Arizona Metals and NextSource Materials 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 Arizona Metals and NextSource Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Arizona Metals and NextSource Materials

-0.03

Correlation Coefficient

Arizona Metals  NextSource Materials

Good diversification

The 3 months correlation between Arizona and NextSource is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Arizona Metals Corp and NextSource Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextSource Materials and Arizona Metals 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 Arizona Metals Corp are associated (or correlated) with NextSource Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextSource Materials has no effect on the direction of Arizona Metals i.e., Arizona Metals and NextSource Materials go up and down completely randomly.

Pair Corralation between Arizona Metals and NextSource Materials

Assuming the 90 days horizon Arizona Metals Corp is expected to generate 0.86 times more return on investment than NextSource Materials. However, Arizona Metals Corp is 1.17 times less risky than NextSource Materials. It trades about 0.04 of its potential returns per unit of risk. NextSource Materials is currently generating about -0.11 per unit of risk. If you would invest  52.00  in Arizona Metals Corp on October 7, 2025 and sell it today you would earn a total of  3.00  from holding Arizona Metals Corp or generate 5.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Arizona Metals Corp  vs.  NextSource Materials

Arizona Metals Corp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Arizona Metals Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Arizona Metals may actually be approaching a critical reversion point that can send shares even higher in February 2026.

NextSource Materials

Risk-Adjusted Performance

Weakest

Over the last 90 days NextSource Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2026. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Arizona Metals and NextSource Materials

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

The idea behind Arizona Metals Corp and NextSource Materials 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.