Correlation Between Galane Gold and Marvel Gold
Can any of the company-specific risk be diversified away by investing in both Galane Gold and Marvel Gold 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 Galane Gold and Marvel Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galane Gold and Marvel Gold Limited, you can compare the effects of market volatilities on Galane Gold and Marvel Gold 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 Galane Gold with a short position of Marvel Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galane Gold and Marvel Gold.
Diversification Opportunities for Galane Gold and Marvel Gold
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Galane and Marvel is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Galane Gold and Marvel Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvel Gold Limited and Galane 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 Galane Gold are associated (or correlated) with Marvel Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marvel Gold Limited has no effect on the direction of Galane Gold i.e., Galane Gold and Marvel Gold go up and down completely randomly.
Pair Corralation between Galane Gold and Marvel Gold
Assuming the 90 days horizon Galane Gold is expected to generate 0.63 times more return on investment than Marvel Gold. However, Galane Gold is 1.58 times less risky than Marvel Gold. It trades about 0.11 of its potential returns per unit of risk. Marvel Gold Limited is currently generating about -0.15 per unit of risk. If you would invest 19.00 in Galane Gold on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Galane Gold or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galane Gold vs. Marvel Gold Limited
Performance |
| Timeline |
| Galane Gold |
| Marvel Gold Limited |
Galane Gold and Marvel Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galane Gold and Marvel Gold
The main advantage of trading using opposite Galane Gold and Marvel Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galane Gold position performs unexpectedly, Marvel Gold 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 Marvel Gold will offset losses from the drop in Marvel Gold's long position.| Galane Gold vs. Fortuna Silver Mines | Galane Gold vs. White Gold Corp | Galane Gold vs. Maple Gold Mines | Galane Gold vs. Orogen Royalties |
| Marvel Gold vs. Liberty Gold Corp | Marvel Gold vs. Lion One Metals | Marvel Gold vs. GGX Gold Corp | Marvel Gold vs. Hummingbird Resources PLC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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