Correlation Between Eminent Gold and EMX Royalty
Can any of the company-specific risk be diversified away by investing in both Eminent Gold and EMX 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 Eminent Gold and EMX Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eminent Gold Corp and EMX Royalty Corp, you can compare the effects of market volatilities on Eminent Gold and EMX 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 Eminent Gold with a short position of EMX Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eminent Gold and EMX Royalty.
Diversification Opportunities for Eminent Gold and EMX Royalty
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eminent and EMX is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eminent Gold Corp and EMX Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMX Royalty Corp and Eminent Gold 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 Eminent Gold Corp are associated (or correlated) with EMX Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMX Royalty Corp has no effect on the direction of Eminent Gold i.e., Eminent Gold and EMX Royalty go up and down completely randomly.
Pair Corralation between Eminent Gold and EMX Royalty
Assuming the 90 days horizon Eminent Gold Corp is expected to under-perform the EMX Royalty. In addition to that, Eminent Gold is 2.12 times more volatile than EMX Royalty Corp. It trades about -0.36 of its total potential returns per unit of risk. EMX Royalty Corp is currently generating about -0.07 per unit of volatility. If you would invest 179.00 in EMX Royalty Corp on September 4, 2024 and sell it today you would lose (5.00) from holding EMX Royalty Corp or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Eminent Gold Corp vs. EMX Royalty Corp
Performance |
| Timeline |
| Eminent Gold Corp |
| EMX Royalty Corp |
Eminent Gold and EMX Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eminent Gold and EMX Royalty
The main advantage of trading using opposite Eminent Gold and EMX Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eminent Gold position performs unexpectedly, EMX 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 EMX Royalty will offset losses from the drop in EMX Royalty's long position.| Eminent Gold vs. Qubec Nickel Corp | Eminent Gold vs. IGO Limited | Eminent Gold vs. Avarone Metals | Eminent Gold vs. Adriatic Metals PLC |
| EMX Royalty vs. Qubec Nickel Corp | EMX Royalty vs. American Rare Earths | EMX Royalty vs. Cypress Development Corp | EMX Royalty vs. Jervois 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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