Correlation Between Austin Gold and Labrador Gold
Can any of the company-specific risk be diversified away by investing in both Austin Gold and Labrador 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 Austin Gold and Labrador Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austin Gold Corp and Labrador Gold Corp, you can compare the effects of market volatilities on Austin Gold and Labrador 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 Austin Gold with a short position of Labrador Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austin Gold and Labrador Gold.
Diversification Opportunities for Austin Gold and Labrador Gold
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Austin and Labrador is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Austin Gold Corp and Labrador Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador Gold Corp and Austin Gold 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 Austin Gold Corp are associated (or correlated) with Labrador Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Gold Corp has no effect on the direction of Austin Gold i.e., Austin Gold and Labrador Gold go up and down completely randomly.
Pair Corralation between Austin Gold and Labrador Gold
Given the investment horizon of 90 days Austin Gold Corp is expected to under-perform the Labrador Gold. In addition to that, Austin Gold is 1.62 times more volatile than Labrador Gold Corp. It trades about -0.19 of its total potential returns per unit of risk. Labrador Gold Corp is currently generating about -0.2 per unit of volatility. If you would invest 5.55 in Labrador Gold Corp on August 31, 2024 and sell it today you would lose (1.25) from holding Labrador Gold Corp or give up 22.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austin Gold Corp vs. Labrador Gold Corp
Performance |
| Timeline |
| Austin Gold Corp |
| Labrador Gold Corp |
Austin Gold and Labrador Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austin Gold and Labrador Gold
The main advantage of trading using opposite Austin Gold and Labrador Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austin Gold position performs unexpectedly, Labrador 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 Labrador Gold will offset losses from the drop in Labrador Gold's long position.| Austin Gold vs. Paramount Gold Nevada | Austin Gold vs. Liberty Gold Corp | Austin Gold vs. GoldMining | Austin Gold vs. International Tower Hill |
| Labrador Gold vs. Exploits Discovery Corp | Labrador Gold vs. Mako Mining Corp | Labrador Gold vs. Puma Exploration | Labrador Gold vs. Aurion Resources |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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