Correlation Between Baru Gold and CANEX Metals
Can any of the company-specific risk be diversified away by investing in both Baru Gold and CANEX Metals 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 CANEX Metals 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 CANEX Metals, you can compare the effects of market volatilities on Baru Gold and CANEX Metals 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 CANEX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baru Gold and CANEX Metals.
Diversification Opportunities for Baru Gold and CANEX Metals
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baru and CANEX is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Baru Gold Corp and CANEX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANEX Metals 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 CANEX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANEX Metals has no effect on the direction of Baru Gold i.e., Baru Gold and CANEX Metals go up and down completely randomly.
Pair Corralation between Baru Gold and CANEX Metals
Assuming the 90 days horizon Baru Gold is expected to generate 1.58 times less return on investment than CANEX Metals. But when comparing it to its historical volatility, Baru Gold Corp is 2.11 times less risky than CANEX Metals. It trades about 0.09 of its potential returns per unit of risk. CANEX Metals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3.71 in CANEX Metals on September 19, 2024 and sell it today you would lose (1.68) from holding CANEX Metals or give up 45.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Baru Gold Corp vs. CANEX Metals
Performance |
| Timeline |
| Baru Gold Corp |
| CANEX Metals |
Baru Gold and CANEX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baru Gold and CANEX Metals
The main advantage of trading using opposite Baru Gold and CANEX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baru Gold position performs unexpectedly, CANEX Metals 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 CANEX Metals will offset losses from the drop in CANEX Metals' 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 |
| CANEX Metals vs. Antioquia Gold | CANEX Metals vs. Radisson Mining Resources | CANEX Metals vs. Asante Gold | CANEX Metals vs. Baru 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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