Correlation Between Baru Gold and Independence Gold
Can any of the company-specific risk be diversified away by investing in both Baru Gold 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 Baru Gold and Independence 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 Independence Gold Corp, you can compare the effects of market volatilities on Baru Gold 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 Baru Gold with a short position of Independence Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baru Gold and Independence Gold.
Diversification Opportunities for Baru Gold and Independence Gold
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baru and Independence is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Baru Gold Corp 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 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 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 Baru Gold i.e., Baru Gold and Independence Gold go up and down completely randomly.
Pair Corralation between Baru Gold and Independence Gold
Assuming the 90 days horizon Baru Gold is expected to generate 4.01 times less return on investment than Independence Gold. But when comparing it to its historical volatility, Baru Gold Corp is 5.2 times less risky than Independence Gold. It trades about 0.07 of its potential returns per unit of risk. Independence Gold Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Independence Gold Corp on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Independence Gold Corp or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baru Gold Corp vs. Independence Gold Corp
Performance |
| Timeline |
| Baru Gold Corp |
| Independence Gold Corp |
Baru Gold and Independence Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baru Gold and Independence Gold
The main advantage of trading using opposite Baru Gold and Independence Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baru Gold 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.| Baru Gold vs. Allegiant Gold | Baru Gold vs. 1911 Gold Corp | Baru Gold vs. Altamira Gold Corp | Baru Gold vs. Gold Terra Resource |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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