Correlation Between Cantex Mine and Gold Reserve
Can any of the company-specific risk be diversified away by investing in both Cantex Mine and Gold Reserve 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 Cantex Mine and Gold Reserve into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantex Mine Development and Gold Reserve, you can compare the effects of market volatilities on Cantex Mine and Gold Reserve 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 Cantex Mine with a short position of Gold Reserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantex Mine and Gold Reserve.
Diversification Opportunities for Cantex Mine and Gold Reserve
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cantex and Gold is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and Gold Reserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Reserve and Cantex Mine 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 Cantex Mine Development are associated (or correlated) with Gold Reserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Reserve has no effect on the direction of Cantex Mine i.e., Cantex Mine and Gold Reserve go up and down completely randomly.
Pair Corralation between Cantex Mine and Gold Reserve
Assuming the 90 days horizon Cantex Mine is expected to generate 2.7 times less return on investment than Gold Reserve. In addition to that, Cantex Mine is 1.25 times more volatile than Gold Reserve. It trades about 0.01 of its total potential returns per unit of risk. Gold Reserve is currently generating about 0.03 per unit of volatility. If you would invest 125.00 in Gold Reserve on August 30, 2024 and sell it today you would earn a total of 25.00 from holding Gold Reserve or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cantex Mine Development vs. Gold Reserve
Performance |
| Timeline |
| Cantex Mine Development |
| Gold Reserve |
Cantex Mine and Gold Reserve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantex Mine and Gold Reserve
The main advantage of trading using opposite Cantex Mine and Gold Reserve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantex Mine position performs unexpectedly, Gold Reserve 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 Gold Reserve will offset losses from the drop in Gold Reserve's long position.| Cantex Mine vs. Rockridge Resources | Cantex Mine vs. Ameriwest Lithium | Cantex Mine vs. Osisko Metals Incorporated | Cantex Mine vs. Volt Lithium Corp |
| Gold Reserve vs. Monarch Mining | Gold Reserve vs. Lundin Gold | Gold Reserve vs. Liberty Gold Corp | Gold Reserve vs. Minera Alamos |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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