Correlation Between Eskay Mining and Galway Metals
Can any of the company-specific risk be diversified away by investing in both Eskay Mining and Galway Metals 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 Eskay Mining and Galway Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eskay Mining Corp and Galway Metals, you can compare the effects of market volatilities on Eskay Mining and Galway Metals 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 Eskay Mining with a short position of Galway Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and Galway Metals.
Diversification Opportunities for Eskay Mining and Galway Metals
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eskay and Galway is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and Galway Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galway Metals and Eskay Mining 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 Eskay Mining Corp are associated (or correlated) with Galway Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galway Metals has no effect on the direction of Eskay Mining i.e., Eskay Mining and Galway Metals go up and down completely randomly.
Pair Corralation between Eskay Mining and Galway Metals
Assuming the 90 days horizon Eskay Mining is expected to generate 3.05 times less return on investment than Galway Metals. But when comparing it to its historical volatility, Eskay Mining Corp is 1.5 times less risky than Galway Metals. It trades about 0.08 of its potential returns per unit of risk. Galway Metals is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Galway Metals on November 3, 2024 and sell it today you would earn a total of 10.00 from holding Galway Metals or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eskay Mining Corp vs. Galway Metals
Performance |
| Timeline |
| Eskay Mining Corp |
| Galway Metals |
Eskay Mining and Galway Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and Galway Metals
The main advantage of trading using opposite Eskay Mining and Galway Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay Mining position performs unexpectedly, Galway Metals 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 Galway Metals will offset losses from the drop in Galway Metals' long position.| Eskay Mining vs. Grande Portage Resources | Eskay Mining vs. Strikepoint Gold | Eskay Mining vs. Blackrock Silver Corp | Eskay Mining vs. American Creek Resources |
| Galway Metals vs. Cartier Resources | Galway Metals vs. Tristar Gold | Galway Metals vs. Maritime Resources Corp | Galway Metals vs. Banyan Gold 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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