Correlation Between Gitennes Exploration and Rainy Mountain
Can any of the company-specific risk be diversified away by investing in both Gitennes Exploration and Rainy Mountain 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 Gitennes Exploration and Rainy Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gitennes Exploration and Rainy Mountain Royalty, you can compare the effects of market volatilities on Gitennes Exploration and Rainy Mountain 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 Gitennes Exploration with a short position of Rainy Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gitennes Exploration and Rainy Mountain.
Diversification Opportunities for Gitennes Exploration and Rainy Mountain
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gitennes and Rainy is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gitennes Exploration and Rainy Mountain Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rainy Mountain Royalty and Gitennes Exploration 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 Gitennes Exploration are associated (or correlated) with Rainy Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rainy Mountain Royalty has no effect on the direction of Gitennes Exploration i.e., Gitennes Exploration and Rainy Mountain go up and down completely randomly.
Pair Corralation between Gitennes Exploration and Rainy Mountain
Assuming the 90 days horizon Gitennes Exploration is expected to generate 1.94 times more return on investment than Rainy Mountain. However, Gitennes Exploration is 1.94 times more volatile than Rainy Mountain Royalty. It trades about 0.06 of its potential returns per unit of risk. Rainy Mountain Royalty is currently generating about -0.21 per unit of risk. If you would invest 23.00 in Gitennes Exploration on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Gitennes Exploration or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gitennes Exploration vs. Rainy Mountain Royalty
Performance |
| Timeline |
| Gitennes Exploration |
| Rainy Mountain Royalty |
Gitennes Exploration and Rainy Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gitennes Exploration and Rainy Mountain
The main advantage of trading using opposite Gitennes Exploration and Rainy Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gitennes Exploration position performs unexpectedly, Rainy Mountain 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 Rainy Mountain will offset losses from the drop in Rainy Mountain's long position.| Gitennes Exploration vs. First Majestic Silver | Gitennes Exploration vs. Ivanhoe Energy | Gitennes Exploration vs. Orezone Gold Corp |
| Rainy Mountain vs. Doman Building Materials | Rainy Mountain vs. Queens Road Capital | Rainy Mountain vs. Enerev5 Metals | Rainy Mountain vs. Slate Grocery REIT |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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