Correlation Between Cabral Gold and Klondike Gold
Can any of the company-specific risk be diversified away by investing in both Cabral Gold and Klondike 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 Cabral Gold and Klondike Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cabral Gold and Klondike Gold Corp, you can compare the effects of market volatilities on Cabral Gold and Klondike 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 Cabral Gold with a short position of Klondike Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabral Gold and Klondike Gold.
Diversification Opportunities for Cabral Gold and Klondike Gold
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cabral and Klondike is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cabral Gold and Klondike Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Gold Corp 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 Klondike Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Gold Corp has no effect on the direction of Cabral Gold i.e., Cabral Gold and Klondike Gold go up and down completely randomly.
Pair Corralation between Cabral Gold and Klondike Gold
Assuming the 90 days horizon Cabral Gold is expected to generate 2.35 times less return on investment than Klondike Gold. In addition to that, Cabral Gold is 1.02 times more volatile than Klondike Gold Corp. It trades about 0.11 of its total potential returns per unit of risk. Klondike Gold Corp is currently generating about 0.27 per unit of volatility. If you would invest 4.00 in Klondike Gold Corp on November 28, 2024 and sell it today you would earn a total of 1.68 from holding Klondike Gold Corp or generate 42.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabral Gold vs. Klondike Gold Corp
Performance |
| Timeline |
| Cabral Gold |
| Klondike Gold Corp |
Cabral Gold and Klondike Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabral Gold and Klondike Gold
The main advantage of trading using opposite Cabral Gold and Klondike Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabral Gold position performs unexpectedly, Klondike 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 Klondike Gold will offset losses from the drop in Klondike Gold's long position.| Cabral Gold vs. Puma Exploration | Cabral Gold vs. Endurance Gold | Cabral Gold vs. Red Pine Exploration | Cabral Gold vs. Falcon Gold Corp |
| Klondike Gold vs. Puma Exploration | Klondike Gold vs. Sixty North Gold | Klondike Gold vs. Red Pine Exploration | Klondike Gold vs. Grande Portage 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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