Correlation Between Flinders Resources and Granada Gold
Can any of the company-specific risk be diversified away by investing in both Flinders Resources and Granada Gold 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 Flinders Resources and Granada Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flinders Resources Limited and Granada Gold Mine, you can compare the effects of market volatilities on Flinders Resources and Granada Gold 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 Flinders Resources with a short position of Granada Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flinders Resources and Granada Gold.
Diversification Opportunities for Flinders Resources and Granada Gold
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flinders and Granada is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited and Granada Gold Mine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granada Gold Mine and Flinders Resources 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 Flinders Resources Limited are associated (or correlated) with Granada Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granada Gold Mine has no effect on the direction of Flinders Resources i.e., Flinders Resources and Granada Gold go up and down completely randomly.
Pair Corralation between Flinders Resources and Granada Gold
Assuming the 90 days horizon Flinders Resources is expected to generate 1.01 times less return on investment than Granada Gold. But when comparing it to its historical volatility, Flinders Resources Limited is 5.56 times less risky than Granada Gold. It trades about 0.24 of its potential returns per unit of risk. Granada Gold Mine is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Granada Gold Mine on October 22, 2024 and sell it today you would lose (0.50) from holding Granada Gold Mine or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flinders Resources Limited vs. Granada Gold Mine
Performance |
| Timeline |
| Flinders Resources |
| Granada Gold Mine |
Flinders Resources and Granada Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flinders Resources and Granada Gold
The main advantage of trading using opposite Flinders Resources and Granada Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flinders Resources position performs unexpectedly, Granada Gold 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 Granada Gold will offset losses from the drop in Granada Gold's long position.| Flinders Resources vs. Canso Select Opportunities | Flinders Resources vs. WELL Health Technologies | Flinders Resources vs. Guru Organic Energy | Flinders Resources vs. Jamieson Wellness |
| Granada Gold vs. Triumph Gold Corp | Granada Gold vs. Monarca Minerals | Granada Gold vs. CANEX Metals | Granada Gold vs. Gungnir 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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