Correlation Between Cerrado Gold and Big Ridge
Can any of the company-specific risk be diversified away by investing in both Cerrado Gold and Big Ridge 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 Cerrado Gold and Big Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerrado Gold and Big Ridge Gold, you can compare the effects of market volatilities on Cerrado Gold and Big Ridge 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 Cerrado Gold with a short position of Big Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerrado Gold and Big Ridge.
Diversification Opportunities for Cerrado Gold and Big Ridge
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cerrado and Big is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cerrado Gold and Big Ridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Ridge Gold and Cerrado 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 Cerrado Gold are associated (or correlated) with Big Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Ridge Gold has no effect on the direction of Cerrado Gold i.e., Cerrado Gold and Big Ridge go up and down completely randomly.
Pair Corralation between Cerrado Gold and Big Ridge
Assuming the 90 days horizon Cerrado Gold is expected to generate 0.86 times more return on investment than Big Ridge. However, Cerrado Gold is 1.17 times less risky than Big Ridge. It trades about -0.07 of its potential returns per unit of risk. Big Ridge Gold is currently generating about -0.08 per unit of risk. If you would invest 28.00 in Cerrado Gold on August 29, 2024 and sell it today you would lose (3.00) from holding Cerrado Gold or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cerrado Gold vs. Big Ridge Gold
Performance |
| Timeline |
| Cerrado Gold |
| Big Ridge Gold |
Cerrado Gold and Big Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerrado Gold and Big Ridge
The main advantage of trading using opposite Cerrado Gold and Big Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerrado Gold position performs unexpectedly, Big Ridge 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 Big Ridge will offset losses from the drop in Big Ridge's long position.| Cerrado Gold vs. Aurion Resources | Cerrado Gold vs. Liberty Gold Corp | Cerrado Gold vs. Orezone Gold Corp | Cerrado Gold vs. Fortuna Silver Mines |
| Big Ridge vs. Minnova Corp | Big Ridge vs. Argo Gold | Big Ridge vs. Advance Gold Corp | Big Ridge vs. Blue Star Gold |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |