Correlation Between Galantas Gold and Major Drilling
Can any of the company-specific risk be diversified away by investing in both Galantas Gold and Major Drilling 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 Major Drilling 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 Major Drilling Group, you can compare the effects of market volatilities on Galantas Gold and Major Drilling 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 Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galantas Gold and Major Drilling.
Diversification Opportunities for Galantas Gold and Major Drilling
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Galantas and Major is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Galantas Gold Corp and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group 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 Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of Galantas Gold i.e., Galantas Gold and Major Drilling go up and down completely randomly.
Pair Corralation between Galantas Gold and Major Drilling
Assuming the 90 days horizon Galantas Gold Corp is expected to under-perform the Major Drilling. In addition to that, Galantas Gold is 3.45 times more volatile than Major Drilling Group. It trades about -0.27 of its total potential returns per unit of risk. Major Drilling Group is currently generating about 0.1 per unit of volatility. If you would invest 846.00 in Major Drilling Group on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Major Drilling Group or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galantas Gold Corp vs. Major Drilling Group
Performance |
| Timeline |
| Galantas Gold Corp |
| Major Drilling Group |
Galantas Gold and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galantas Gold and Major Drilling
The main advantage of trading using opposite Galantas Gold and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galantas Gold position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling'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 |
| Major Drilling vs. Foraco International SA | Major Drilling vs. Geodrill Limited | Major Drilling vs. Bri Chem 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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