Correlation Between District Metals and Eminent Gold
Can any of the company-specific risk be diversified away by investing in both District Metals and Eminent 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 District Metals and Eminent Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between District Metals Corp and Eminent Gold Corp, you can compare the effects of market volatilities on District Metals and Eminent 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 District Metals with a short position of Eminent Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of District Metals and Eminent Gold.
Diversification Opportunities for District Metals and Eminent Gold
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between District and Eminent is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding District Metals Corp and Eminent Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eminent Gold Corp and District Metals 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 District Metals Corp are associated (or correlated) with Eminent Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eminent Gold Corp has no effect on the direction of District Metals i.e., District Metals and Eminent Gold go up and down completely randomly.
Pair Corralation between District Metals and Eminent Gold
Assuming the 90 days horizon District Metals is expected to generate 3.47 times less return on investment than Eminent Gold. But when comparing it to its historical volatility, District Metals Corp is 1.6 times less risky than Eminent Gold. It trades about 0.05 of its potential returns per unit of risk. Eminent Gold Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 28.00 in Eminent Gold Corp on November 27, 2024 and sell it today you would earn a total of 10.00 from holding Eminent Gold Corp or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
District Metals Corp vs. Eminent Gold Corp
Performance |
| Timeline |
| District Metals Corp |
| Eminent Gold Corp |
District Metals and Eminent Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with District Metals and Eminent Gold
The main advantage of trading using opposite District Metals and Eminent Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if District Metals position performs unexpectedly, Eminent 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 Eminent Gold will offset losses from the drop in Eminent Gold's long position.| District Metals vs. Equity Metals Corp | District Metals vs. GR Silver Mining | District Metals vs. AbraSilver Resource Corp | District Metals vs. Sable Resources |
| Eminent Gold vs. Tier One Silver | Eminent Gold vs. Angus Ventures | Eminent Gold vs. Empress Royalty Corp | Eminent Gold vs. District Metals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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