Correlation Between Cymbria and Dynacor Gold
Can any of the company-specific risk be diversified away by investing in both Cymbria and Dynacor 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 Cymbria and Dynacor Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cymbria and Dynacor Gold Mines, you can compare the effects of market volatilities on Cymbria and Dynacor 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 Cymbria with a short position of Dynacor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cymbria and Dynacor Gold.
Diversification Opportunities for Cymbria and Dynacor Gold
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cymbria and Dynacor is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cymbria and Dynacor Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynacor Gold Mines and Cymbria 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 Cymbria are associated (or correlated) with Dynacor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynacor Gold Mines has no effect on the direction of Cymbria i.e., Cymbria and Dynacor Gold go up and down completely randomly.
Pair Corralation between Cymbria and Dynacor Gold
Assuming the 90 days trading horizon Cymbria is expected to generate 2.93 times less return on investment than Dynacor Gold. But when comparing it to its historical volatility, Cymbria is 1.97 times less risky than Dynacor Gold. It trades about 0.07 of its potential returns per unit of risk. Dynacor Gold Mines is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 282.00 in Dynacor Gold Mines on September 3, 2024 and sell it today you would earn a total of 327.00 from holding Dynacor Gold Mines or generate 115.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cymbria vs. Dynacor Gold Mines
Performance |
| Timeline |
| Cymbria |
| Dynacor Gold Mines |
Cymbria and Dynacor Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cymbria and Dynacor Gold
The main advantage of trading using opposite Cymbria and Dynacor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cymbria position performs unexpectedly, Dynacor 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 Dynacor Gold will offset losses from the drop in Dynacor Gold's long position.| Cymbria vs. Clairvest Group | Cymbria vs. Uniteds Limited | Cymbria vs. E L Financial Corp | Cymbria vs. Senvest Capital |
| Dynacor Gold vs. Erdene Resource Development | Dynacor Gold vs. Starcore International Mines | Dynacor Gold vs. GoldQuest Mining Corp | Dynacor Gold vs. Belo Sun Mining |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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