Correlation Between Big Ridge and US Gold
Can any of the company-specific risk be diversified away by investing in both Big Ridge and US 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 US 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 US Gold Corp, you can compare the effects of market volatilities on Big Ridge and US 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 US Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Ridge and US Gold.
Diversification Opportunities for Big Ridge and US Gold
Good diversification
The 3 months correlation between Big and USAU is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Big Ridge Gold and US Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US 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 US Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Gold Corp has no effect on the direction of Big Ridge i.e., Big Ridge and US Gold go up and down completely randomly.
Pair Corralation between Big Ridge and US Gold
Assuming the 90 days horizon Big Ridge Gold is expected to generate 2.45 times more return on investment than US Gold. However, Big Ridge is 2.45 times more volatile than US Gold Corp. It trades about 0.04 of its potential returns per unit of risk. US Gold Corp is currently generating about 0.05 per unit of risk. If you would invest 9.00 in Big Ridge Gold on November 2, 2024 and sell it today you would lose (3.10) from holding Big Ridge Gold or give up 34.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Ridge Gold vs. US Gold Corp
Performance |
| Timeline |
| Big Ridge Gold |
| US Gold Corp |
Big Ridge and US Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Ridge and US Gold
The main advantage of trading using opposite Big Ridge and US Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Ridge position performs unexpectedly, US 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 US Gold will offset losses from the drop in US 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 |
| US Gold vs. Labrador Gold Corp | US Gold vs. Aurion Resources | US Gold vs. Puma Exploration | US Gold vs. Golden Star Resource |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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