Correlation Between Ninepoint Gold and Compass

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

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

Diversification Opportunities for Ninepoint Gold and Compass

-0.45

Correlation Coefficient

Ninepoint Gold  Compass

Very good diversification

The 3 months correlation between Ninepoint and Compass is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ninepoint Gold and and Compass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass and Ninepoint 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 Ninepoint Gold and are associated (or correlated) with Compass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass has no effect on the direction of Ninepoint Gold i.e., Ninepoint Gold and Compass go up and down completely randomly.

Pair Corralation between Ninepoint Gold and Compass

Assuming the 90 days trading horizon Ninepoint Gold and is expected to generate 0.79 times more return on investment than Compass. However, Ninepoint Gold and is 1.26 times less risky than Compass. It trades about 0.17 of its potential returns per unit of risk. Compass is currently generating about 0.07 per unit of risk. If you would invest  2,248  in Ninepoint Gold and on August 26, 2025 and sell it today you would earn a total of  673.00  from holding Ninepoint Gold and or generate 29.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Ninepoint Gold and  vs.  Compass

Ninepoint Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ninepoint Gold and are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak basic indicators, Ninepoint Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Compass

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Compass are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile primary indicators, Compass reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ninepoint Gold and Compass

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

The idea behind Ninepoint Gold and and Compass 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.