Correlation Between GoGold Resources and Plata Latina
Can any of the company-specific risk be diversified away by investing in both GoGold Resources and Plata Latina 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 GoGold Resources and Plata Latina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoGold Resources and Plata Latina Minerals, you can compare the effects of market volatilities on GoGold Resources and Plata Latina 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 GoGold Resources with a short position of Plata Latina. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoGold Resources and Plata Latina.
Diversification Opportunities for GoGold Resources and Plata Latina
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GoGold and Plata is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and Plata Latina Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plata Latina Minerals and GoGold 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 GoGold Resources are associated (or correlated) with Plata Latina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plata Latina Minerals has no effect on the direction of GoGold Resources i.e., GoGold Resources and Plata Latina go up and down completely randomly.
Pair Corralation between GoGold Resources and Plata Latina
Assuming the 90 days trading horizon GoGold Resources is expected to under-perform the Plata Latina. But the stock apears to be less risky and, when comparing its historical volatility, GoGold Resources is 5.04 times less risky than Plata Latina. The stock trades about -0.01 of its potential returns per unit of risk. The Plata Latina Minerals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Plata Latina Minerals on September 2, 2024 and sell it today you would lose (1.00) from holding Plata Latina Minerals or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
GoGold Resources vs. Plata Latina Minerals
Performance |
| Timeline |
| GoGold Resources |
| Plata Latina Minerals |
GoGold Resources and Plata Latina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoGold Resources and Plata Latina
The main advantage of trading using opposite GoGold Resources and Plata Latina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources position performs unexpectedly, Plata Latina 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 Plata Latina will offset losses from the drop in Plata Latina's long position.| GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Liberty Gold Corp | GoGold Resources vs. Dolly Varden Silver | GoGold Resources vs. Minaurum Gold |
| Plata Latina vs. Minaurum Gold | Plata Latina vs. Dolly Varden Silver | Plata Latina vs. Santacruz Silv | Plata Latina vs. GoGold Resources |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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