Correlation Between NeXGold Mining and E L

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

By analyzing existing cross correlation between NeXGold Mining Corp and E L Financial 3, you can compare the effects of market volatilities on NeXGold Mining and E L 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 NeXGold Mining with a short position of E L. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and E L.

Diversification Opportunities for NeXGold Mining and E L

0.04

Correlation Coefficient

NeXGold Mining  E L

Significant diversification

The 3 months correlation between NeXGold and ELF-PH is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and E L Financial 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E L Financial and NeXGold Mining 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 NeXGold Mining Corp are associated (or correlated) with E L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E L Financial has no effect on the direction of NeXGold Mining i.e., NeXGold Mining and E L go up and down completely randomly.

Pair Corralation between NeXGold Mining and E L

Assuming the 90 days trading horizon NeXGold Mining is expected to generate 3.25 times less return on investment than E L. In addition to that, NeXGold Mining is 4.79 times more volatile than E L Financial 3. It trades about 0.01 of its total potential returns per unit of risk. E L Financial 3 is currently generating about 0.2 per unit of volatility. If you would invest  2,196  in E L Financial 3 on April 22, 2025 and sell it today you would earn a total of  156.00  from holding E L Financial 3 or generate 7.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NeXGold Mining Corp  vs.  E L Financial 3

NeXGold Mining Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NeXGold Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, NeXGold Mining is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

E L Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in E L Financial 3 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal technical and fundamental indicators, E L may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with NeXGold Mining and E L

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

The idea behind NeXGold Mining Corp and E L Financial 3 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..