Correlation Between Bellevue Gold and Cerrado Gold
Can any of the company-specific risk be diversified away by investing in both Bellevue Gold and Cerrado 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 Bellevue Gold and Cerrado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bellevue Gold Limited and Cerrado Gold, you can compare the effects of market volatilities on Bellevue Gold and Cerrado 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 Bellevue Gold with a short position of Cerrado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bellevue Gold and Cerrado Gold.
Diversification Opportunities for Bellevue Gold and Cerrado Gold
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bellevue and Cerrado is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bellevue Gold Limited and Cerrado Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cerrado Gold and Bellevue 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 Bellevue Gold Limited are associated (or correlated) with Cerrado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cerrado Gold has no effect on the direction of Bellevue Gold i.e., Bellevue Gold and Cerrado Gold go up and down completely randomly.
Pair Corralation between Bellevue Gold and Cerrado Gold
Assuming the 90 days horizon Bellevue Gold Limited is expected to generate 5.26 times more return on investment than Cerrado Gold. However, Bellevue Gold is 5.26 times more volatile than Cerrado Gold. It trades about 0.06 of its potential returns per unit of risk. Cerrado Gold is currently generating about 0.03 per unit of risk. If you would invest 115.00 in Bellevue Gold Limited on August 25, 2024 and sell it today you would lose (35.00) from holding Bellevue Gold Limited or give up 30.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bellevue Gold Limited vs. Cerrado Gold
Performance |
| Timeline |
| Bellevue Gold Limited |
| Cerrado Gold |
Bellevue Gold and Cerrado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bellevue Gold and Cerrado Gold
The main advantage of trading using opposite Bellevue Gold and Cerrado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bellevue Gold position performs unexpectedly, Cerrado 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 Cerrado Gold will offset losses from the drop in Cerrado Gold's long position.| Bellevue Gold vs. Aurion Resources | Bellevue Gold vs. Liberty Gold Corp | Bellevue Gold vs. Rio2 Limited | Bellevue Gold vs. Orezone Gold Corp |
| Cerrado Gold vs. Antioquia Gold | Cerrado Gold vs. Red Pine Exploration | Cerrado Gold vs. Bellevue Gold Limited | Cerrado Gold vs. Asante Gold |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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