Correlation Between GoldMining and Gold Royalty
Can any of the company-specific risk be diversified away by investing in both GoldMining and Gold Royalty 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 GoldMining and Gold Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Gold Royalty Corp, you can compare the effects of market volatilities on GoldMining and Gold Royalty 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 GoldMining with a short position of Gold Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Gold Royalty.
Diversification Opportunities for GoldMining and Gold Royalty
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between GoldMining and Gold is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Gold Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Royalty Corp and GoldMining 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 GoldMining are associated (or correlated) with Gold Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Royalty Corp has no effect on the direction of GoldMining i.e., GoldMining and Gold Royalty go up and down completely randomly.
Pair Corralation between GoldMining and Gold Royalty
Given the investment horizon of 90 days GoldMining is expected to generate 1.07 times more return on investment than Gold Royalty. However, GoldMining is 1.07 times more volatile than Gold Royalty Corp. It trades about -0.12 of its potential returns per unit of risk. Gold Royalty Corp is currently generating about -0.29 per unit of risk. If you would invest 93.00 in GoldMining on August 28, 2024 and sell it today you would lose (7.00) from holding GoldMining or give up 7.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoldMining vs. Gold Royalty Corp
Performance |
| Timeline |
| GoldMining |
| Gold Royalty Corp |
GoldMining and Gold Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Gold Royalty
The main advantage of trading using opposite GoldMining and Gold Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, Gold Royalty 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 Gold Royalty will offset losses from the drop in Gold Royalty's long position.| GoldMining vs. Gold Royalty Corp | GoldMining vs. Uranium Royalty Corp | GoldMining vs. Metalla Royalty Streaming | GoldMining vs. Equinox Gold Corp |
| Gold Royalty vs. Endeavour Silver Corp | Gold Royalty vs. SilverCrest Metals | Gold Royalty vs. Platinum Group Metals | Gold Royalty vs. New Pacific Metals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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