Correlation Between Baru Gold and Contact Gold
Can any of the company-specific risk be diversified away by investing in both Baru Gold and Contact 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 Baru Gold and Contact Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baru Gold Corp and Contact Gold Corp, you can compare the effects of market volatilities on Baru Gold and Contact 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 Baru Gold with a short position of Contact Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baru Gold and Contact Gold.
Diversification Opportunities for Baru Gold and Contact Gold
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baru and Contact is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Baru Gold Corp and Contact Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contact Gold Corp and Baru 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 Baru Gold Corp are associated (or correlated) with Contact Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contact Gold Corp has no effect on the direction of Baru Gold i.e., Baru Gold and Contact Gold go up and down completely randomly.
Pair Corralation between Baru Gold and Contact Gold
If you would invest 1.45 in Baru Gold Corp on August 29, 2024 and sell it today you would earn a total of 2.18 from holding Baru Gold Corp or generate 150.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Baru Gold Corp vs. Contact Gold Corp
Performance |
| Timeline |
| Baru Gold Corp |
| Contact Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Baru Gold and Contact Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baru Gold and Contact Gold
The main advantage of trading using opposite Baru Gold and Contact Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baru Gold position performs unexpectedly, Contact 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 Contact Gold will offset losses from the drop in Contact Gold's long position.| Baru Gold vs. Allegiant Gold | Baru Gold vs. 1911 Gold Corp | Baru Gold vs. Altamira Gold Corp | Baru Gold vs. Gold Terra Resource |
| Contact Gold vs. Fremont Gold | Contact Gold vs. Norsemont Mining | Contact Gold vs. Hummingbird Resources PLC | Contact Gold vs. Tudor 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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