Correlation Between Bravada Gold and Colonial Coal
Can any of the company-specific risk be diversified away by investing in both Bravada Gold and Colonial Coal 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 Colonial Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bravada Gold and Colonial Coal International, you can compare the effects of market volatilities on Bravada Gold and Colonial Coal 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 Colonial Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bravada Gold and Colonial Coal.
Diversification Opportunities for Bravada Gold and Colonial Coal
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bravada and Colonial is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bravada Gold and Colonial Coal International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colonial Coal Intern 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 Colonial Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colonial Coal Intern has no effect on the direction of Bravada Gold i.e., Bravada Gold and Colonial Coal go up and down completely randomly.
Pair Corralation between Bravada Gold and Colonial Coal
Assuming the 90 days horizon Bravada Gold is expected to under-perform the Colonial Coal. In addition to that, Bravada Gold is 2.58 times more volatile than Colonial Coal International. It trades about -0.02 of its total potential returns per unit of risk. Colonial Coal International is currently generating about 0.01 per unit of volatility. If you would invest 225.00 in Colonial Coal International on September 3, 2024 and sell it today you would lose (10.00) from holding Colonial Coal International or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bravada Gold vs. Colonial Coal International
Performance |
| Timeline |
| Bravada Gold |
| Colonial Coal Intern |
Bravada Gold and Colonial Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bravada Gold and Colonial Coal
The main advantage of trading using opposite Bravada Gold and Colonial Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bravada Gold position performs unexpectedly, Colonial Coal 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 Colonial Coal will offset losses from the drop in Colonial Coal's long position.| Bravada Gold vs. Angkor Resources Corp | Bravada Gold vs. Eros Resources Corp | Bravada Gold vs. Avrupa Minerals | Bravada Gold vs. New Destiny Mining |
| Colonial Coal vs. Batero Gold Corp | Colonial Coal vs. Bravada Gold | Colonial Coal vs. Black Widow Resources | Colonial Coal vs. Angkor Resources 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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