Correlation Between Big Ridge and Independence Gold
Can any of the company-specific risk be diversified away by investing in both Big Ridge and Independence 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 Independence 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 Independence Gold Corp, you can compare the effects of market volatilities on Big Ridge and Independence 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 Independence Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Ridge and Independence Gold.
Diversification Opportunities for Big Ridge and Independence Gold
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Big and Independence is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Big Ridge Gold and Independence Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence 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 Independence Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Gold Corp has no effect on the direction of Big Ridge i.e., Big Ridge and Independence Gold go up and down completely randomly.
Pair Corralation between Big Ridge and Independence Gold
Assuming the 90 days horizon Big Ridge Gold is expected to generate 1.43 times more return on investment than Independence Gold. However, Big Ridge is 1.43 times more volatile than Independence Gold Corp. It trades about 0.06 of its potential returns per unit of risk. Independence Gold Corp is currently generating about 0.01 per unit of risk. If you would invest 5.00 in Big Ridge Gold on October 21, 2024 and sell it today you would earn a total of 1.30 from holding Big Ridge Gold or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Ridge Gold vs. Independence Gold Corp
Performance |
| Timeline |
| Big Ridge Gold |
| Independence Gold Corp |
Big Ridge and Independence Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Ridge and Independence Gold
The main advantage of trading using opposite Big Ridge and Independence Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Ridge position performs unexpectedly, Independence 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 Independence Gold will offset losses from the drop in Independence 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 |
| Independence Gold vs. Heliostar Metals | Independence Gold vs. Revival Gold | Independence Gold vs. Cabral Gold | Independence Gold vs. Cassiar Gold Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Global Correlations Find global opportunities by holding instruments from different markets |