Correlation Between Falcon Gold and Grande Portage
Can any of the company-specific risk be diversified away by investing in both Falcon Gold and Grande Portage 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 Falcon Gold and Grande Portage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Gold Corp and Grande Portage Resources, you can compare the effects of market volatilities on Falcon Gold and Grande Portage 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 Falcon Gold with a short position of Grande Portage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Gold and Grande Portage.
Diversification Opportunities for Falcon Gold and Grande Portage
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Falcon and Grande is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Gold Corp and Grande Portage Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Portage Resources and Falcon 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 Falcon Gold Corp are associated (or correlated) with Grande Portage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Portage Resources has no effect on the direction of Falcon Gold i.e., Falcon Gold and Grande Portage go up and down completely randomly.
Pair Corralation between Falcon Gold and Grande Portage
Assuming the 90 days horizon Falcon Gold Corp is expected to generate 1.65 times more return on investment than Grande Portage. However, Falcon Gold is 1.65 times more volatile than Grande Portage Resources. It trades about -0.09 of its potential returns per unit of risk. Grande Portage Resources is currently generating about -0.26 per unit of risk. If you would invest 3.49 in Falcon Gold Corp on August 25, 2024 and sell it today you would lose (0.97) from holding Falcon Gold Corp or give up 27.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Gold Corp vs. Grande Portage Resources
Performance |
| Timeline |
| Falcon Gold Corp |
| Grande Portage Resources |
Falcon Gold and Grande Portage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Gold and Grande Portage
The main advantage of trading using opposite Falcon Gold and Grande Portage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Gold position performs unexpectedly, Grande Portage 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 Grande Portage will offset losses from the drop in Grande Portage's long position.| Falcon Gold vs. Aurion Resources | Falcon Gold vs. Liberty Gold Corp | Falcon Gold vs. Rio2 Limited | Falcon Gold vs. Orezone Gold Corp |
| Grande Portage vs. Ascendant Resources | Grande Portage vs. Cantex Mine Development | Grande Portage vs. Amarc Resources | Grande Portage vs. Sterling Metals 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 CEOs Directory module to screen CEOs from public companies around the world.
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