Correlation Between DRDGOLD Limited and First Mining
Can any of the company-specific risk be diversified away by investing in both DRDGOLD Limited and First Mining 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 DRDGOLD Limited and First Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRDGOLD Limited ADR and First Mining Gold, you can compare the effects of market volatilities on DRDGOLD Limited and First Mining 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 DRDGOLD Limited with a short position of First Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRDGOLD Limited and First Mining.
Diversification Opportunities for DRDGOLD Limited and First Mining
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DRDGOLD and First is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding DRDGOLD Limited ADR and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold and DRDGOLD Limited 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 DRDGOLD Limited ADR are associated (or correlated) with First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of DRDGOLD Limited i.e., DRDGOLD Limited and First Mining go up and down completely randomly.
Pair Corralation between DRDGOLD Limited and First Mining
Considering the 90-day investment horizon DRDGOLD Limited ADR is expected to under-perform the First Mining. But the stock apears to be less risky and, when comparing its historical volatility, DRDGOLD Limited ADR is 1.24 times less risky than First Mining. The stock trades about -0.24 of its potential returns per unit of risk. The First Mining Gold is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 11.00 in First Mining Gold on August 29, 2024 and sell it today you would lose (1.70) from holding First Mining Gold or give up 15.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
DRDGOLD Limited ADR vs. First Mining Gold
Performance |
| Timeline |
| DRDGOLD Limited ADR |
| First Mining Gold |
DRDGOLD Limited and First Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DRDGOLD Limited and First Mining
The main advantage of trading using opposite DRDGOLD Limited and First Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRDGOLD Limited position performs unexpectedly, First Mining 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 First Mining will offset losses from the drop in First Mining's long position.| DRDGOLD Limited vs. Osisko Gold Ro | DRDGOLD Limited vs. Eldorado Gold Corp | DRDGOLD Limited vs. SSR Mining | DRDGOLD Limited vs. Idaho Strategic Resources |
| First Mining vs. Silver Hammer Mining | First Mining vs. Reyna Silver Corp | First Mining vs. Guanajuato Silver | First Mining vs. Silver One Resources |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |