Correlation Between Eastern Platinum and Gold Royalty
Can any of the company-specific risk be diversified away by investing in both Eastern Platinum and Gold Royalty 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 Eastern Platinum and Gold Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Platinum Limited and Gold Royalty Corp, you can compare the effects of market volatilities on Eastern Platinum and Gold Royalty 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 Eastern Platinum with a short position of Gold Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Platinum and Gold Royalty.
Diversification Opportunities for Eastern Platinum and Gold Royalty
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and Gold is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Platinum Limited and Gold Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Royalty Corp and Eastern Platinum 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 Eastern Platinum Limited are associated (or correlated) with Gold Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Royalty Corp has no effect on the direction of Eastern Platinum i.e., Eastern Platinum and Gold Royalty go up and down completely randomly.
Pair Corralation between Eastern Platinum and Gold Royalty
Assuming the 90 days horizon Eastern Platinum Limited is expected to under-perform the Gold Royalty. In addition to that, Eastern Platinum is 2.71 times more volatile than Gold Royalty Corp. It trades about -0.05 of its total potential returns per unit of risk. Gold Royalty Corp is currently generating about -0.09 per unit of volatility. If you would invest 131.00 in Gold Royalty Corp on September 14, 2024 and sell it today you would lose (6.00) from holding Gold Royalty Corp or give up 4.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eastern Platinum Limited vs. Gold Royalty Corp
Performance |
| Timeline |
| Eastern Platinum |
| Gold Royalty Corp |
Eastern Platinum and Gold Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Platinum and Gold Royalty
The main advantage of trading using opposite Eastern Platinum and Gold Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Platinum position performs unexpectedly, Gold Royalty 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 Royalty will offset losses from the drop in Gold Royalty's long position.| Eastern Platinum vs. Thunder Mountain Gold | Eastern Platinum vs. Chesapeake Gold Corp | Eastern Platinum vs. AbraSilver Resource Corp | Eastern Platinum vs. GoGold Resources |
| Gold Royalty vs. Endeavour Silver Corp | Gold Royalty vs. SilverCrest Metals | Gold Royalty vs. Platinum Group Metals | Gold Royalty vs. New Pacific Metals |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |