Correlation Between Galantas Gold and Mineros SA

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Can any of the company-specific risk be diversified away by investing in both Galantas Gold and Mineros SA 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 Mineros SA 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 Mineros SA, you can compare the effects of market volatilities on Galantas Gold and Mineros SA 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 Mineros SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galantas Gold and Mineros SA.

Diversification Opportunities for Galantas Gold and Mineros SA

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Galantas and Mineros is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Galantas Gold Corp and Mineros SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mineros SA 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 Mineros SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mineros SA has no effect on the direction of Galantas Gold i.e., Galantas Gold and Mineros SA go up and down completely randomly.

Pair Corralation between Galantas Gold and Mineros SA

Assuming the 90 days horizon Galantas Gold Corp is expected to under-perform the Mineros SA. In addition to that, Galantas Gold is 2.33 times more volatile than Mineros SA. It trades about -0.03 of its total potential returns per unit of risk. Mineros SA is currently generating about 0.1 per unit of volatility. If you would invest  48.00  in Mineros SA on September 13, 2024 and sell it today you would earn a total of  118.00  from holding Mineros SA or generate 245.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Galantas Gold Corp  vs.  Mineros SA

 Performance 
       Timeline  
Galantas Gold Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Galantas Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
Mineros SA 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Mineros SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Mineros SA displayed solid returns over the last few months and may actually be approaching a breakup point.

Galantas Gold and Mineros SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Galantas Gold and Mineros SA

The main advantage of trading using opposite Galantas Gold and Mineros SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galantas Gold position performs unexpectedly, Mineros SA 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 Mineros SA will offset losses from the drop in Mineros SA's long position.
The idea behind Galantas Gold Corp and Mineros SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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