Correlation Between Cabral Gold and Eloro Resources
Can any of the company-specific risk be diversified away by investing in both Cabral Gold and Eloro 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 Cabral Gold and Eloro Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cabral Gold and Eloro Resources, you can compare the effects of market volatilities on Cabral Gold and Eloro 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 Cabral Gold with a short position of Eloro Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabral Gold and Eloro Resources.
Diversification Opportunities for Cabral Gold and Eloro Resources
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cabral and Eloro is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cabral Gold and Eloro Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eloro Resources and Cabral 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 Cabral Gold are associated (or correlated) with Eloro Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eloro Resources has no effect on the direction of Cabral Gold i.e., Cabral Gold and Eloro Resources go up and down completely randomly.
Pair Corralation between Cabral Gold and Eloro Resources
Assuming the 90 days horizon Cabral Gold is expected to under-perform the Eloro Resources. In addition to that, Cabral Gold is 1.75 times more volatile than Eloro Resources. It trades about -0.06 of its total potential returns per unit of risk. Eloro Resources is currently generating about 0.0 per unit of volatility. If you would invest 74.00 in Eloro Resources on September 1, 2024 and sell it today you would lose (2.00) from holding Eloro Resources or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabral Gold vs. Eloro Resources
Performance |
| Timeline |
| Cabral Gold |
| Eloro Resources |
Cabral Gold and Eloro Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabral Gold and Eloro Resources
The main advantage of trading using opposite Cabral Gold and Eloro Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabral Gold position performs unexpectedly, Eloro 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 Eloro Resources will offset losses from the drop in Eloro Resources' long position.| Cabral Gold vs. Puma Exploration | Cabral Gold vs. Endurance Gold | Cabral Gold vs. Red Pine Exploration | Cabral Gold vs. Fremont Gold |
| Eloro Resources vs. Labrador Gold Corp | Eloro Resources vs. Lion One Metals | Eloro Resources vs. Novo Resources Corp | Eloro Resources vs. Irving 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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