Correlation Between GFG Resources and Jaguar Mining
Can any of the company-specific risk be diversified away by investing in both GFG Resources and Jaguar Mining 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 GFG Resources and Jaguar Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFG Resources and Jaguar Mining, you can compare the effects of market volatilities on GFG Resources and Jaguar Mining 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 GFG Resources with a short position of Jaguar Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFG Resources and Jaguar Mining.
Diversification Opportunities for GFG Resources and Jaguar Mining
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GFG and Jaguar is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding GFG Resources and Jaguar Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Mining and GFG Resources 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 GFG Resources are associated (or correlated) with Jaguar Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Mining has no effect on the direction of GFG Resources i.e., GFG Resources and Jaguar Mining go up and down completely randomly.
Pair Corralation between GFG Resources and Jaguar Mining
Assuming the 90 days horizon GFG Resources is expected to under-perform the Jaguar Mining. In addition to that, GFG Resources is 1.02 times more volatile than Jaguar Mining. It trades about -0.27 of its total potential returns per unit of risk. Jaguar Mining is currently generating about -0.21 per unit of volatility. If you would invest 322.00 in Jaguar Mining on September 1, 2024 and sell it today you would lose (53.00) from holding Jaguar Mining or give up 16.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GFG Resources vs. Jaguar Mining
Performance |
| Timeline |
| GFG Resources |
| Jaguar Mining |
GFG Resources and Jaguar Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFG Resources and Jaguar Mining
The main advantage of trading using opposite GFG Resources and Jaguar Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFG Resources position performs unexpectedly, Jaguar Mining 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 Jaguar Mining will offset losses from the drop in Jaguar Mining's long position.| GFG Resources vs. Aurion Resources | GFG Resources vs. Rio2 Limited | GFG Resources vs. Palamina Corp | GFG Resources vs. BTU Metals Corp |
| Jaguar Mining vs. South32 Limited | Jaguar Mining vs. NioCorp Developments Ltd | Jaguar Mining vs. HUMANA INC | Jaguar Mining vs. SCOR PK |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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