Correlation Between Batero Gold and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both Batero Gold and Canaf Investments 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 Batero Gold and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batero Gold Corp and Canaf Investments, you can compare the effects of market volatilities on Batero Gold and Canaf Investments 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 Batero Gold with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batero Gold and Canaf Investments.
Diversification Opportunities for Batero Gold and Canaf Investments
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Batero and Canaf is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Batero Gold Corp and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and Batero 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 Batero Gold Corp are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Batero Gold i.e., Batero Gold and Canaf Investments go up and down completely randomly.
Pair Corralation between Batero Gold and Canaf Investments
Assuming the 90 days horizon Batero Gold Corp is expected to generate 3.37 times more return on investment than Canaf Investments. However, Batero Gold is 3.37 times more volatile than Canaf Investments. It trades about 0.06 of its potential returns per unit of risk. Canaf Investments is currently generating about 0.08 per unit of risk. If you would invest 4.00 in Batero Gold Corp on September 5, 2024 and sell it today you would earn a total of 1.00 from holding Batero Gold Corp or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Batero Gold Corp vs. Canaf Investments
Performance |
| Timeline |
| Batero Gold Corp |
| Canaf Investments |
Batero Gold and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batero Gold and Canaf Investments
The main advantage of trading using opposite Batero Gold and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batero Gold position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| Batero Gold vs. Canaf Investments | Batero Gold vs. Summa Silver Corp | Batero Gold vs. Monument Mining Limited | Batero Gold vs. Renoworks Software |
| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Orezone Gold Corp | Canaf Investments vs. Faraday Copper 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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