Correlation Between Bluestone Resources and Lumina Gold
Can any of the company-specific risk be diversified away by investing in both Bluestone Resources and Lumina 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 Bluestone Resources and Lumina Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluestone Resources and Lumina Gold Corp, you can compare the effects of market volatilities on Bluestone Resources and Lumina 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 Bluestone Resources with a short position of Lumina Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluestone Resources and Lumina Gold.
Diversification Opportunities for Bluestone Resources and Lumina Gold
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bluestone and Lumina is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bluestone Resources and Lumina Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumina Gold Corp and Bluestone Resources 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 Bluestone Resources are associated (or correlated) with Lumina Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumina Gold Corp has no effect on the direction of Bluestone Resources i.e., Bluestone Resources and Lumina Gold go up and down completely randomly.
Pair Corralation between Bluestone Resources and Lumina Gold
Assuming the 90 days horizon Bluestone Resources is expected to generate 0.71 times more return on investment than Lumina Gold. However, Bluestone Resources is 1.41 times less risky than Lumina Gold. It trades about -0.07 of its potential returns per unit of risk. Lumina Gold Corp is currently generating about -0.27 per unit of risk. If you would invest 32.00 in Bluestone Resources on August 29, 2024 and sell it today you would lose (1.00) from holding Bluestone Resources or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluestone Resources vs. Lumina Gold Corp
Performance |
| Timeline |
| Bluestone Resources |
| Lumina Gold Corp |
Bluestone Resources and Lumina Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluestone Resources and Lumina Gold
The main advantage of trading using opposite Bluestone Resources and Lumina Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluestone Resources position performs unexpectedly, Lumina 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 Lumina Gold will offset losses from the drop in Lumina Gold's long position.| Bluestone Resources vs. First Majestic Silver | Bluestone Resources vs. Ivanhoe Energy | Bluestone Resources vs. Orezone Gold Corp | Bluestone Resources vs. Faraday Copper Corp |
| Lumina Gold vs. Bluestone Resources | Lumina Gold vs. Kore Mining | Lumina Gold vs. Torq Resources | Lumina Gold vs. Regulus Resources |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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