Correlation Between Canada Silver and Golden Lake
Can any of the company-specific risk be diversified away by investing in both Canada Silver and Golden Lake 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 Canada Silver and Golden Lake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canada Silver Cobalt and Golden Lake Exploration, you can compare the effects of market volatilities on Canada Silver and Golden Lake 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 Canada Silver with a short position of Golden Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Silver and Golden Lake.
Diversification Opportunities for Canada Silver and Golden Lake
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canada and Golden is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Canada Silver Cobalt and Golden Lake Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Lake Exploration and Canada Silver 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 Canada Silver Cobalt are associated (or correlated) with Golden Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Lake Exploration has no effect on the direction of Canada Silver i.e., Canada Silver and Golden Lake go up and down completely randomly.
Pair Corralation between Canada Silver and Golden Lake
Assuming the 90 days horizon Canada Silver is expected to generate 1.78 times less return on investment than Golden Lake. But when comparing it to its historical volatility, Canada Silver Cobalt is 1.44 times less risky than Golden Lake. It trades about 0.06 of its potential returns per unit of risk. Golden Lake Exploration is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2.90 in Golden Lake Exploration on October 26, 2024 and sell it today you would earn a total of 0.37 from holding Golden Lake Exploration or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Canada Silver Cobalt vs. Golden Lake Exploration
Performance |
| Timeline |
| Canada Silver Cobalt |
| Golden Lake Exploration |
Canada Silver and Golden Lake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canada Silver and Golden Lake
The main advantage of trading using opposite Canada Silver and Golden Lake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Silver position performs unexpectedly, Golden Lake 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 Golden Lake will offset losses from the drop in Golden Lake's long position.| Canada Silver vs. Ardea Resources Limited | Canada Silver vs. Centaurus Metals Limited | Canada Silver vs. Blackstone Minerals | Canada Silver vs. ZincX Resources Corp |
| Golden Lake vs. Prime Meridian Resources | Golden Lake vs. Macmahon Holdings Limited | Golden Lake vs. Rokmaster Resources Corp | Golden Lake vs. Hudson 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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