Correlation Between Bravada Gold and Medallion Resources
Can any of the company-specific risk be diversified away by investing in both Bravada Gold and Medallion Resources 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 Bravada Gold and Medallion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bravada Gold and Medallion Resources, you can compare the effects of market volatilities on Bravada Gold and Medallion Resources 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 Bravada Gold with a short position of Medallion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bravada Gold and Medallion Resources.
Diversification Opportunities for Bravada Gold and Medallion Resources
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bravada and Medallion is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bravada Gold and Medallion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medallion Resources and Bravada 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 Bravada Gold are associated (or correlated) with Medallion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medallion Resources has no effect on the direction of Bravada Gold i.e., Bravada Gold and Medallion Resources go up and down completely randomly.
Pair Corralation between Bravada Gold and Medallion Resources
Assuming the 90 days horizon Bravada Gold is expected to generate 0.86 times more return on investment than Medallion Resources. However, Bravada Gold is 1.17 times less risky than Medallion Resources. It trades about 0.06 of its potential returns per unit of risk. Medallion Resources is currently generating about 0.05 per unit of risk. If you would invest 2.00 in Bravada Gold on December 11, 2024 and sell it today you would earn a total of 0.53 from holding Bravada Gold or generate 26.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.81% |
| Values | Daily Returns |
Bravada Gold vs. Medallion Resources
Performance |
| Timeline |
| Bravada Gold |
| Medallion Resources |
Bravada Gold and Medallion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bravada Gold and Medallion Resources
The main advantage of trading using opposite Bravada Gold and Medallion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bravada Gold position performs unexpectedly, Medallion Resources 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 Medallion Resources will offset losses from the drop in Medallion Resources' long position.| Bravada Gold vs. Golden Goliath Resources | ||
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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