Correlation Between Cabral Gold and Puma Exploration
Can any of the company-specific risk be diversified away by investing in both Cabral Gold and Puma Exploration 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 Puma Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cabral Gold and Puma Exploration, you can compare the effects of market volatilities on Cabral Gold and Puma Exploration 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 Puma Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabral Gold and Puma Exploration.
Diversification Opportunities for Cabral Gold and Puma Exploration
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cabral and Puma is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cabral Gold and Puma Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Exploration 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 Puma Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Exploration has no effect on the direction of Cabral Gold i.e., Cabral Gold and Puma Exploration go up and down completely randomly.
Pair Corralation between Cabral Gold and Puma Exploration
Assuming the 90 days horizon Cabral Gold is expected to generate 1.27 times more return on investment than Puma Exploration. However, Cabral Gold is 1.27 times more volatile than Puma Exploration. It trades about 0.06 of its potential returns per unit of risk. Puma Exploration is currently generating about 0.01 per unit of risk. If you would invest 11.00 in Cabral Gold on August 27, 2024 and sell it today you would earn a total of 9.00 from holding Cabral Gold or generate 81.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabral Gold vs. Puma Exploration
Performance |
| Timeline |
| Cabral Gold |
| Puma Exploration |
Cabral Gold and Puma Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabral Gold and Puma Exploration
The main advantage of trading using opposite Cabral Gold and Puma Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabral Gold position performs unexpectedly, Puma Exploration 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 Puma Exploration will offset losses from the drop in Puma Exploration's long position.| Cabral Gold vs. Puma Exploration | Cabral Gold vs. Endurance Gold | Cabral Gold vs. Red Pine Exploration | Cabral Gold vs. Fremont Gold |
| Puma Exploration vs. Aurion Resources | Puma Exploration vs. Liberty Gold Corp | Puma Exploration vs. Orezone Gold Corp | Puma Exploration vs. Radisson Mining 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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