Correlation Between Chesapeake Gold and Emergent Metals
Can any of the company-specific risk be diversified away by investing in both Chesapeake Gold and Emergent Metals 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 Chesapeake Gold and Emergent Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Gold Corp and Emergent Metals Corp, you can compare the effects of market volatilities on Chesapeake Gold and Emergent Metals 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 Chesapeake Gold with a short position of Emergent Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Gold and Emergent Metals.
Diversification Opportunities for Chesapeake Gold and Emergent Metals
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chesapeake and Emergent is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Gold Corp and Emergent Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Metals Corp and Chesapeake 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 Chesapeake Gold Corp are associated (or correlated) with Emergent Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Metals Corp has no effect on the direction of Chesapeake Gold i.e., Chesapeake Gold and Emergent Metals go up and down completely randomly.
Pair Corralation between Chesapeake Gold and Emergent Metals
Assuming the 90 days horizon Chesapeake Gold Corp is expected to under-perform the Emergent Metals. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Gold Corp is 1.68 times less risky than Emergent Metals. The stock trades about -0.3 of its potential returns per unit of risk. The Emergent Metals Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Emergent Metals Corp on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Emergent Metals Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Gold Corp vs. Emergent Metals Corp
Performance |
| Timeline |
| Chesapeake Gold Corp |
| Emergent Metals Corp |
Chesapeake Gold and Emergent Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Gold and Emergent Metals
The main advantage of trading using opposite Chesapeake Gold and Emergent Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Gold position performs unexpectedly, Emergent Metals 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 Emergent Metals will offset losses from the drop in Emergent Metals' long position.| Chesapeake Gold vs. Bear Creek Mining | Chesapeake Gold vs. Spanish Mountain Gold | Chesapeake Gold vs. Kore Mining | Chesapeake Gold vs. Kootenay Silver |
| Emergent Metals vs. Dynasty Gold Corp | Emergent Metals vs. Eastfield Resources | Emergent Metals vs. Conquest Resources | Emergent Metals vs. Goldcliff Resource 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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