Correlation Between New Found and SportsHero

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Can any of the company-specific risk be diversified away by investing in both New Found and SportsHero 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 New Found and SportsHero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Found Gold and SportsHero Limited, you can compare the effects of market volatilities on New Found and SportsHero 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 New Found with a short position of SportsHero. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Found and SportsHero.

Diversification Opportunities for New Found and SportsHero

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between New and SportsHero is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding New Found Gold and SportsHero Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SportsHero Limited and New Found 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 New Found Gold are associated (or correlated) with SportsHero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SportsHero Limited has no effect on the direction of New Found i.e., New Found and SportsHero go up and down completely randomly.

Pair Corralation between New Found and SportsHero

If you would invest  191.00  in New Found Gold on September 6, 2025 and sell it today you would earn a total of  119.00  from holding New Found Gold or generate 62.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

New Found Gold  vs.  SportsHero Limited

 Performance 
       Timeline  
New Found Gold 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in New Found Gold are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, New Found exhibited solid returns over the last few months and may actually be approaching a breakup point.
SportsHero Limited 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days SportsHero Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SportsHero is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

New Found and SportsHero Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with New Found and SportsHero

The main advantage of trading using opposite New Found and SportsHero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Found position performs unexpectedly, SportsHero 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 SportsHero will offset losses from the drop in SportsHero's long position.
The idea behind New Found Gold and SportsHero Limited 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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