Correlation Between Chesapeake Gold and Radius Gold
Can any of the company-specific risk be diversified away by investing in both Chesapeake Gold and Radius 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 Chesapeake Gold and Radius Gold 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 Radius Gold, you can compare the effects of market volatilities on Chesapeake Gold and Radius 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 Chesapeake Gold with a short position of Radius Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Gold and Radius Gold.
Diversification Opportunities for Chesapeake Gold and Radius Gold
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chesapeake and Radius is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Gold Corp and Radius Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radius Gold 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 Radius Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radius Gold has no effect on the direction of Chesapeake Gold i.e., Chesapeake Gold and Radius Gold go up and down completely randomly.
Pair Corralation between Chesapeake Gold and Radius Gold
Assuming the 90 days horizon Chesapeake Gold is expected to generate 1.87 times less return on investment than Radius Gold. But when comparing it to its historical volatility, Chesapeake Gold Corp is 1.31 times less risky than Radius Gold. It trades about 0.0 of its potential returns per unit of risk. Radius Gold is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Radius Gold on August 31, 2024 and sell it today you would lose (11.00) from holding Radius Gold or give up 57.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Gold Corp vs. Radius Gold
Performance |
| Timeline |
| Chesapeake Gold Corp |
| Radius Gold |
Chesapeake Gold and Radius Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Gold and Radius Gold
The main advantage of trading using opposite Chesapeake Gold and Radius Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Gold position performs unexpectedly, Radius 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 Radius Gold will offset losses from the drop in Radius Gold's long position.| Chesapeake Gold vs. Bear Creek Mining | Chesapeake Gold vs. Spanish Mountain Gold | Chesapeake Gold vs. Kore Mining | Chesapeake Gold vs. Kootenay Silver |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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