Correlation Between Galantas Gold and Monument Mining
Can any of the company-specific risk be diversified away by investing in both Galantas Gold and Monument Mining 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 Monument Mining 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 Monument Mining Limited, you can compare the effects of market volatilities on Galantas Gold and Monument Mining 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 Monument Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galantas Gold and Monument Mining.
Diversification Opportunities for Galantas Gold and Monument Mining
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Galantas and Monument is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Galantas Gold Corp and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining 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 Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of Galantas Gold i.e., Galantas Gold and Monument Mining go up and down completely randomly.
Pair Corralation between Galantas Gold and Monument Mining
Assuming the 90 days horizon Galantas Gold Corp is expected to under-perform the Monument Mining. In addition to that, Galantas Gold is 1.52 times more volatile than Monument Mining Limited. It trades about -0.02 of its total potential returns per unit of risk. Monument Mining Limited is currently generating about 0.07 per unit of volatility. If you would invest 14.00 in Monument Mining Limited on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Monument Mining Limited or generate 107.14% 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. Monument Mining Limited
Performance |
| Timeline |
| Galantas Gold Corp |
| Monument Mining |
Galantas Gold and Monument Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galantas Gold and Monument Mining
The main advantage of trading using opposite Galantas Gold and Monument Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galantas Gold position performs unexpectedly, Monument Mining 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 Monument Mining will offset losses from the drop in Monument Mining's long position.| Galantas Gold vs. Ressources Minieres Radisson | Galantas Gold vs. Red Pine Exploration | Galantas Gold vs. Kore Mining |
| Monument Mining vs. Ressources Minieres Radisson | Monument Mining vs. Galantas Gold Corp | Monument Mining vs. Red Pine Exploration | Monument Mining vs. Kore Mining |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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