Correlation Between Major Drilling and MYFAIR GOLD
Can any of the company-specific risk be diversified away by investing in both Major Drilling and MYFAIR GOLD 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 Major Drilling and MYFAIR GOLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Major Drilling Group and MYFAIR GOLD P, you can compare the effects of market volatilities on Major Drilling and MYFAIR GOLD 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 Major Drilling with a short position of MYFAIR GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Drilling and MYFAIR GOLD.
Diversification Opportunities for Major Drilling and MYFAIR GOLD
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Major and MYFAIR is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Major Drilling Group and MYFAIR GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYFAIR GOLD P and Major Drilling 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 Major Drilling Group are associated (or correlated) with MYFAIR GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYFAIR GOLD P has no effect on the direction of Major Drilling i.e., Major Drilling and MYFAIR GOLD go up and down completely randomly.
Pair Corralation between Major Drilling and MYFAIR GOLD
Assuming the 90 days horizon Major Drilling Group is expected to generate 0.65 times more return on investment than MYFAIR GOLD. However, Major Drilling Group is 1.55 times less risky than MYFAIR GOLD. It trades about 0.04 of its potential returns per unit of risk. MYFAIR GOLD P is currently generating about -0.14 per unit of risk. If you would invest 555.00 in Major Drilling Group on August 25, 2024 and sell it today you would earn a total of 10.00 from holding Major Drilling Group or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Major Drilling Group vs. MYFAIR GOLD P
Performance |
| Timeline |
| Major Drilling Group |
| MYFAIR GOLD P |
Major Drilling and MYFAIR GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Major Drilling and MYFAIR GOLD
The main advantage of trading using opposite Major Drilling and MYFAIR GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Drilling position performs unexpectedly, MYFAIR GOLD 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 MYFAIR GOLD will offset losses from the drop in MYFAIR GOLD's long position.| Major Drilling vs. BHP Group Limited | Major Drilling vs. Superior Plus Corp | Major Drilling vs. NMI Holdings | Major Drilling vs. Origin Agritech |
| MYFAIR GOLD vs. Franco Nevada | MYFAIR GOLD vs. Agnico Eagle Mines | MYFAIR GOLD vs. Superior Plus Corp | MYFAIR GOLD vs. NMI Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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