Correlation Between Generation Mining and Canadian Palladium
Can any of the company-specific risk be diversified away by investing in both Generation Mining and Canadian Palladium 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 Generation Mining and Canadian Palladium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generation Mining Limited and Canadian Palladium Resources, you can compare the effects of market volatilities on Generation Mining and Canadian Palladium 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 Generation Mining with a short position of Canadian Palladium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Mining and Canadian Palladium.
Diversification Opportunities for Generation Mining and Canadian Palladium
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Generation and Canadian is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Generation Mining Limited and Canadian Palladium Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Palladium and Generation Mining 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 Generation Mining Limited are associated (or correlated) with Canadian Palladium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Palladium has no effect on the direction of Generation Mining i.e., Generation Mining and Canadian Palladium go up and down completely randomly.
Pair Corralation between Generation Mining and Canadian Palladium
Assuming the 90 days horizon Generation Mining Limited is expected to under-perform the Canadian Palladium. But the otc stock apears to be less risky and, when comparing its historical volatility, Generation Mining Limited is 2.15 times less risky than Canadian Palladium. The otc stock trades about -0.01 of its potential returns per unit of risk. The Canadian Palladium Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 28.00 in Canadian Palladium Resources on August 31, 2024 and sell it today you would lose (23.56) from holding Canadian Palladium Resources or give up 84.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Generation Mining Limited vs. Canadian Palladium Resources
Performance |
| Timeline |
| Generation Mining |
| Canadian Palladium |
Generation Mining and Canadian Palladium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generation Mining and Canadian Palladium
The main advantage of trading using opposite Generation Mining and Canadian Palladium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation Mining position performs unexpectedly, Canadian Palladium 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 Canadian Palladium will offset losses from the drop in Canadian Palladium's long position.| Generation Mining vs. Mundoro Capital | Generation Mining vs. Norra Metals Corp | Generation Mining vs. E79 Resources Corp | Generation Mining vs. Voltage Metals Corp |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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