Correlation Between Galantas Gold and Chesapeake Gold
Can any of the company-specific risk be diversified away by investing in both Galantas Gold and Chesapeake 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 Galantas Gold and Chesapeake Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galantas Gold Corp and Chesapeake Gold Corp, you can compare the effects of market volatilities on Galantas Gold and Chesapeake 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 Galantas Gold with a short position of Chesapeake Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galantas Gold and Chesapeake Gold.
Diversification Opportunities for Galantas Gold and Chesapeake Gold
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Galantas and Chesapeake is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Galantas Gold Corp and Chesapeake Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Gold Corp and Galantas 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 Galantas Gold Corp are associated (or correlated) with Chesapeake Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Gold Corp has no effect on the direction of Galantas Gold i.e., Galantas Gold and Chesapeake Gold go up and down completely randomly.
Pair Corralation between Galantas Gold and Chesapeake Gold
Assuming the 90 days horizon Galantas Gold Corp is expected to under-perform the Chesapeake Gold. In addition to that, Galantas Gold is 1.25 times more volatile than Chesapeake Gold Corp. It trades about -0.02 of its total potential returns per unit of risk. Chesapeake Gold Corp is currently generating about 0.0 per unit of volatility. If you would invest 169.00 in Chesapeake Gold Corp on August 31, 2024 and sell it today you would lose (68.00) from holding Chesapeake Gold Corp or give up 40.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galantas Gold Corp vs. Chesapeake Gold Corp
Performance |
| Timeline |
| Galantas Gold Corp |
| Chesapeake Gold Corp |
Galantas Gold and Chesapeake Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galantas Gold and Chesapeake Gold
The main advantage of trading using opposite Galantas Gold and Chesapeake Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galantas Gold position performs unexpectedly, Chesapeake 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 Chesapeake Gold will offset losses from the drop in Chesapeake Gold's long position.| Galantas Gold vs. Grande Portage Resources | Galantas Gold vs. Stelmine Canada | Galantas Gold vs. Endurance Gold Corp | Galantas Gold vs. Dynasty Gold Corp |
| Chesapeake Gold vs. Bear Creek Mining | Chesapeake Gold vs. Spanish Mountain Gold | Chesapeake Gold vs. Kore Mining | Chesapeake Gold vs. Kootenay Silver |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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