Correlation Between Eskay Mining and Evergold Corp
Can any of the company-specific risk be diversified away by investing in both Eskay Mining and Evergold Corp 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 Evergold Corp 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 Evergold Corp, you can compare the effects of market volatilities on Eskay Mining and Evergold Corp 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 Evergold Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and Evergold Corp.
Diversification Opportunities for Eskay Mining and Evergold Corp
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eskay and Evergold is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and Evergold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergold Corp 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 Evergold Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergold Corp has no effect on the direction of Eskay Mining i.e., Eskay Mining and Evergold Corp go up and down completely randomly.
Pair Corralation between Eskay Mining and Evergold Corp
Assuming the 90 days horizon Eskay Mining is expected to generate 3.97 times less return on investment than Evergold Corp. But when comparing it to its historical volatility, Eskay Mining Corp is 1.45 times less risky than Evergold Corp. It trades about 0.08 of its potential returns per unit of risk. Evergold Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Evergold Corp on November 5, 2024 and sell it today you would earn a total of 0.50 from holding Evergold Corp or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Eskay Mining Corp vs. Evergold Corp
Performance |
| Timeline |
| Eskay Mining Corp |
| Evergold Corp |
Eskay Mining and Evergold Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and Evergold Corp
The main advantage of trading using opposite Eskay Mining and Evergold Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay Mining position performs unexpectedly, Evergold Corp 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 Evergold Corp will offset losses from the drop in Evergold Corp's long position.| Eskay Mining vs. Aftermath Silver | Eskay Mining vs. Group Ten Metals | Eskay Mining vs. Prime Mining Corp | Eskay Mining vs. Juggernaut Exploration |
| Evergold Corp vs. Champion Bear Resources | Evergold Corp vs. Edison Cobalt Corp | Evergold Corp vs. Aurelia Metals Limited | Evergold Corp vs. IGO Limited |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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