Correlation Between Falcon Gold and White Gold
Can any of the company-specific risk be diversified away by investing in both Falcon Gold and White 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 Falcon Gold and White Gold 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 White Gold Corp, you can compare the effects of market volatilities on Falcon Gold and White 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 Falcon Gold with a short position of White Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Gold and White Gold.
Diversification Opportunities for Falcon Gold and White Gold
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Falcon and White is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Gold Corp and White Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Gold Corp 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 White Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Gold Corp has no effect on the direction of Falcon Gold i.e., Falcon Gold and White Gold go up and down completely randomly.
Pair Corralation between Falcon Gold and White Gold
Assuming the 90 days horizon Falcon Gold Corp is expected to generate 2.47 times more return on investment than White Gold. However, Falcon Gold is 2.47 times more volatile than White Gold Corp. It trades about 0.02 of its potential returns per unit of risk. White Gold Corp is currently generating about -0.16 per unit of risk. If you would invest 2.90 in Falcon Gold Corp on August 28, 2024 and sell it today you would lose (0.42) from holding Falcon Gold Corp or give up 14.48% 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. White Gold Corp
Performance |
| Timeline |
| Falcon Gold Corp |
| White Gold Corp |
Falcon Gold and White Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Gold and White Gold
The main advantage of trading using opposite Falcon Gold and White Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Gold position performs unexpectedly, White 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 White Gold will offset losses from the drop in White Gold's long position.| Falcon Gold vs. Aurion Resources | Falcon Gold vs. Liberty Gold Corp | Falcon Gold vs. Orezone Gold Corp | Falcon Gold vs. Fortuna Silver Mines |
| White Gold vs. Puma Exploration | White Gold vs. Endurance Gold | White Gold vs. Grande Portage Resources | White Gold vs. Altamira 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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