Correlation Between Getchell Gold and Rackla Metals
Can any of the company-specific risk be diversified away by investing in both Getchell Gold and Rackla Metals 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 Getchell Gold and Rackla Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getchell Gold Corp and Rackla Metals, you can compare the effects of market volatilities on Getchell Gold and Rackla Metals 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 Getchell Gold with a short position of Rackla Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getchell Gold and Rackla Metals.
Diversification Opportunities for Getchell Gold and Rackla Metals
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Getchell and Rackla is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Getchell Gold Corp and Rackla Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rackla Metals and Getchell 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 Getchell Gold Corp are associated (or correlated) with Rackla Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rackla Metals has no effect on the direction of Getchell Gold i.e., Getchell Gold and Rackla Metals go up and down completely randomly.
Pair Corralation between Getchell Gold and Rackla Metals
Assuming the 90 days horizon Getchell Gold is expected to generate 6.11 times less return on investment than Rackla Metals. But when comparing it to its historical volatility, Getchell Gold Corp is 2.72 times less risky than Rackla Metals. It trades about 0.04 of its potential returns per unit of risk. Rackla Metals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Rackla Metals on August 25, 2024 and sell it today you would earn a total of 1.30 from holding Rackla Metals or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Getchell Gold Corp vs. Rackla Metals
Performance |
| Timeline |
| Getchell Gold Corp |
| Rackla Metals |
Getchell Gold and Rackla Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getchell Gold and Rackla Metals
The main advantage of trading using opposite Getchell Gold and Rackla Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getchell Gold position performs unexpectedly, Rackla Metals 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 Rackla Metals will offset losses from the drop in Rackla Metals' long position.| Getchell Gold vs. Aurion Resources | Getchell Gold vs. Liberty Gold Corp | Getchell Gold vs. Rio2 Limited | Getchell Gold vs. Orezone Gold Corp |
| Rackla Metals vs. Aurion Resources | Rackla Metals vs. Liberty Gold Corp | Rackla Metals vs. Rio2 Limited | Rackla Metals vs. Orezone Gold Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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