Correlation Between Galantas Gold and New Destiny
Can any of the company-specific risk be diversified away by investing in both Galantas Gold and New Destiny 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 New Destiny 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 New Destiny Mining, you can compare the effects of market volatilities on Galantas Gold and New Destiny 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 New Destiny. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galantas Gold and New Destiny.
Diversification Opportunities for Galantas Gold and New Destiny
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Galantas and New is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Galantas Gold Corp and New Destiny Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Destiny 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 New Destiny. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Destiny Mining has no effect on the direction of Galantas Gold i.e., Galantas Gold and New Destiny go up and down completely randomly.
Pair Corralation between Galantas Gold and New Destiny
Assuming the 90 days horizon Galantas Gold Corp is expected to under-perform the New Destiny. But the stock apears to be less risky and, when comparing its historical volatility, Galantas Gold Corp is 1.37 times less risky than New Destiny. The stock trades about -0.04 of its potential returns per unit of risk. The New Destiny Mining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.00 in New Destiny Mining on September 12, 2024 and sell it today you would earn a total of 0.00 from holding New Destiny Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Galantas Gold Corp vs. New Destiny Mining
Performance |
| Timeline |
| Galantas Gold Corp |
| New Destiny Mining |
Galantas Gold and New Destiny Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galantas Gold and New Destiny
The main advantage of trading using opposite Galantas Gold and New Destiny positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galantas Gold position performs unexpectedly, New Destiny 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 New Destiny will offset losses from the drop in New Destiny's long position.| Galantas Gold vs. Ressources Minieres Radisson | Galantas Gold vs. Red Pine Exploration | Galantas Gold vs. Kore Mining |
| New Destiny vs. Ressources Minieres Radisson | New Destiny vs. Galantas Gold Corp | New Destiny vs. Red Pine Exploration | New Destiny 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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