Correlation Between Big Ridge and Baru Gold
Can any of the company-specific risk be diversified away by investing in both Big Ridge and Baru 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 Big Ridge and Baru Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Ridge Gold and Baru Gold Corp, you can compare the effects of market volatilities on Big Ridge and Baru 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 Big Ridge with a short position of Baru Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Ridge and Baru Gold.
Diversification Opportunities for Big Ridge and Baru Gold
Very good diversification
The 3 months correlation between Big and Baru is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Big Ridge Gold and Baru Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baru Gold Corp and Big Ridge 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 Big Ridge Gold are associated (or correlated) with Baru Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baru Gold Corp has no effect on the direction of Big Ridge i.e., Big Ridge and Baru Gold go up and down completely randomly.
Pair Corralation between Big Ridge and Baru Gold
Assuming the 90 days horizon Big Ridge Gold is expected to generate 1.8 times more return on investment than Baru Gold. However, Big Ridge is 1.8 times more volatile than Baru Gold Corp. It trades about 0.08 of its potential returns per unit of risk. Baru Gold Corp is currently generating about -0.01 per unit of risk. If you would invest 6.00 in Big Ridge Gold on October 21, 2024 and sell it today you would earn a total of 0.30 from holding Big Ridge Gold or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Big Ridge Gold vs. Baru Gold Corp
Performance |
| Timeline |
| Big Ridge Gold |
| Baru Gold Corp |
Big Ridge and Baru Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Ridge and Baru Gold
The main advantage of trading using opposite Big Ridge and Baru Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Ridge position performs unexpectedly, Baru 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 Baru Gold will offset losses from the drop in Baru Gold's long position.| Big Ridge vs. Minnova Corp | Big Ridge vs. Argo Gold | Big Ridge vs. Advance Gold Corp | Big Ridge vs. Blue Star Gold |
| Baru Gold vs. Quebec Precious Metals | Baru Gold vs. Bluestone Resources | Baru Gold vs. Elemental Royalties Corp | Baru Gold vs. Aurelius Minerals |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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