Correlation Between Galiano Gold and Prime Meridian
Can any of the company-specific risk be diversified away by investing in both Galiano Gold and Prime Meridian 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 Galiano Gold and Prime Meridian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galiano Gold and Prime Meridian Resources, you can compare the effects of market volatilities on Galiano Gold and Prime Meridian 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 Galiano Gold with a short position of Prime Meridian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galiano Gold and Prime Meridian.
Diversification Opportunities for Galiano Gold and Prime Meridian
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Galiano and Prime is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Galiano Gold and Prime Meridian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Meridian Resources and Galiano 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 Galiano Gold are associated (or correlated) with Prime Meridian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Meridian Resources has no effect on the direction of Galiano Gold i.e., Galiano Gold and Prime Meridian go up and down completely randomly.
Pair Corralation between Galiano Gold and Prime Meridian
Considering the 90-day investment horizon Galiano Gold is expected to generate 1.85 times less return on investment than Prime Meridian. But when comparing it to its historical volatility, Galiano Gold is 4.17 times less risky than Prime Meridian. It trades about 0.07 of its potential returns per unit of risk. Prime Meridian Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8.69 in Prime Meridian Resources on September 12, 2024 and sell it today you would lose (1.69) from holding Prime Meridian Resources or give up 19.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Galiano Gold vs. Prime Meridian Resources
Performance |
| Timeline |
| Galiano Gold |
| Prime Meridian Resources |
Galiano Gold and Prime Meridian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galiano Gold and Prime Meridian
The main advantage of trading using opposite Galiano Gold and Prime Meridian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galiano Gold position performs unexpectedly, Prime Meridian 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 Prime Meridian will offset losses from the drop in Prime Meridian's long position.| Galiano Gold vs. Avino Silver Gold | Galiano Gold vs. Americas Silver Corp | Galiano Gold vs. Paramount Gold Nevada | Galiano Gold vs. Fury Gold Mines |
| Prime Meridian vs. Revival Gold | Prime Meridian vs. Galiano Gold | Prime Meridian vs. US Gold Corp | Prime Meridian vs. HUMANA INC |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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