Correlation Between Big Ridge and Roscan Gold
Can any of the company-specific risk be diversified away by investing in both Big Ridge and Roscan 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 Roscan 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 Roscan Gold Corp, you can compare the effects of market volatilities on Big Ridge and Roscan 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 Roscan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Ridge and Roscan Gold.
Diversification Opportunities for Big Ridge and Roscan Gold
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Big and Roscan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Big Ridge Gold and Roscan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roscan 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 Roscan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roscan Gold Corp has no effect on the direction of Big Ridge i.e., Big Ridge and Roscan Gold go up and down completely randomly.
Pair Corralation between Big Ridge and Roscan Gold
Assuming the 90 days horizon Big Ridge Gold is expected to generate 1.32 times more return on investment than Roscan Gold. However, Big Ridge is 1.32 times more volatile than Roscan Gold Corp. It trades about 0.07 of its potential returns per unit of risk. Roscan Gold Corp is currently generating about 0.01 per unit of risk. If you would invest 4.00 in Big Ridge Gold on August 25, 2024 and sell it today you would earn a total of 2.80 from holding Big Ridge Gold or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Ridge Gold vs. Roscan Gold Corp
Performance |
| Timeline |
| Big Ridge Gold |
| Roscan Gold Corp |
Big Ridge and Roscan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Ridge and Roscan Gold
The main advantage of trading using opposite Big Ridge and Roscan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Ridge position performs unexpectedly, Roscan 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 Roscan Gold will offset losses from the drop in Roscan 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 |
| Roscan Gold vs. Aurion Resources | Roscan Gold vs. Liberty Gold Corp | Roscan Gold vs. Rio2 Limited | Roscan Gold vs. Orezone 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |