Correlation Between Banyan Gold and Maple Gold
Can any of the company-specific risk be diversified away by investing in both Banyan Gold and Maple 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 Banyan Gold and Maple Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banyan Gold Corp and Maple Gold Mines, you can compare the effects of market volatilities on Banyan Gold and Maple 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 Banyan Gold with a short position of Maple Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banyan Gold and Maple Gold.
Diversification Opportunities for Banyan Gold and Maple Gold
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banyan and Maple is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Banyan Gold Corp and Maple Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Gold Mines and Banyan 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 Banyan Gold Corp are associated (or correlated) with Maple Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Gold Mines has no effect on the direction of Banyan Gold i.e., Banyan Gold and Maple Gold go up and down completely randomly.
Pair Corralation between Banyan Gold and Maple Gold
Assuming the 90 days horizon Banyan Gold Corp is expected to generate 0.54 times more return on investment than Maple Gold. However, Banyan Gold Corp is 1.87 times less risky than Maple Gold. It trades about -0.1 of its potential returns per unit of risk. Maple Gold Mines is currently generating about -0.12 per unit of risk. If you would invest 23.00 in Banyan Gold Corp on August 26, 2024 and sell it today you would lose (2.00) from holding Banyan Gold Corp or give up 8.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banyan Gold Corp vs. Maple Gold Mines
Performance |
| Timeline |
| Banyan Gold Corp |
| Maple Gold Mines |
Banyan Gold and Maple Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banyan Gold and Maple Gold
The main advantage of trading using opposite Banyan Gold and Maple Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banyan Gold position performs unexpectedly, Maple 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 Maple Gold will offset losses from the drop in Maple Gold's long position.| Banyan Gold vs. Galway Metals | Banyan Gold vs. Rockhaven Resources | Banyan Gold vs. Cartier Resources | Banyan Gold vs. Maritime Resources Corp |
| Maple Gold vs. Liberty Gold Corp | Maple Gold vs. Cartier Resources | Maple Gold vs. Banyan Gold Corp | Maple Gold vs. Maritime 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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