Correlation Between Galantas Gold and Pacific Ridge
Can any of the company-specific risk be diversified away by investing in both Galantas Gold and Pacific Ridge 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 Pacific Ridge 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 Pacific Ridge Exploration, you can compare the effects of market volatilities on Galantas Gold and Pacific Ridge 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 Pacific Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galantas Gold and Pacific Ridge.
Diversification Opportunities for Galantas Gold and Pacific Ridge
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Galantas and Pacific is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Galantas Gold Corp and Pacific Ridge Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Ridge Exploration 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 Pacific Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Ridge Exploration has no effect on the direction of Galantas Gold i.e., Galantas Gold and Pacific Ridge go up and down completely randomly.
Pair Corralation between Galantas Gold and Pacific Ridge
Assuming the 90 days horizon Galantas Gold Corp is expected to generate 0.74 times more return on investment than Pacific Ridge. However, Galantas Gold Corp is 1.34 times less risky than Pacific Ridge. It trades about -0.03 of its potential returns per unit of risk. Pacific Ridge Exploration is currently generating about -0.03 per unit of risk. If you would invest 25.00 in Galantas Gold Corp on September 12, 2024 and sell it today you would lose (18.00) from holding Galantas Gold Corp or give up 72.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galantas Gold Corp vs. Pacific Ridge Exploration
Performance |
| Timeline |
| Galantas Gold Corp |
| Pacific Ridge Exploration |
Galantas Gold and Pacific Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galantas Gold and Pacific Ridge
The main advantage of trading using opposite Galantas Gold and Pacific Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galantas Gold position performs unexpectedly, Pacific Ridge 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 Pacific Ridge will offset losses from the drop in Pacific Ridge's long position.| Galantas Gold vs. Ressources Minieres Radisson | Galantas Gold vs. Red Pine Exploration | Galantas Gold vs. Kore Mining |
| Pacific Ridge vs. Commander Resources | Pacific Ridge vs. Galantas Gold Corp | Pacific Ridge vs. Grande Portage Resources | Pacific Ridge vs. Wescan Goldfields |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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