Correlation Between Golden Lake and Adriatic Metals
Can any of the company-specific risk be diversified away by investing in both Golden Lake and Adriatic 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 Golden Lake and Adriatic Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Lake Exploration and Adriatic Metals PLC, you can compare the effects of market volatilities on Golden Lake and Adriatic 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 Golden Lake with a short position of Adriatic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Lake and Adriatic Metals.
Diversification Opportunities for Golden Lake and Adriatic Metals
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and Adriatic is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Golden Lake Exploration and Adriatic Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriatic Metals PLC and Golden Lake 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 Golden Lake Exploration are associated (or correlated) with Adriatic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriatic Metals PLC has no effect on the direction of Golden Lake i.e., Golden Lake and Adriatic Metals go up and down completely randomly.
Pair Corralation between Golden Lake and Adriatic Metals
Assuming the 90 days horizon Golden Lake Exploration is expected to under-perform the Adriatic Metals. In addition to that, Golden Lake is 2.94 times more volatile than Adriatic Metals PLC. It trades about -0.2 of its total potential returns per unit of risk. Adriatic Metals PLC is currently generating about -0.15 per unit of volatility. If you would invest 290.00 in Adriatic Metals PLC on August 25, 2024 and sell it today you would lose (27.00) from holding Adriatic Metals PLC or give up 9.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Lake Exploration vs. Adriatic Metals PLC
Performance |
| Timeline |
| Golden Lake Exploration |
| Adriatic Metals PLC |
Golden Lake and Adriatic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Lake and Adriatic Metals
The main advantage of trading using opposite Golden Lake and Adriatic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Lake position performs unexpectedly, Adriatic 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 Adriatic Metals will offset losses from the drop in Adriatic Metals' long position.| Golden Lake vs. Norra Metals Corp | Golden Lake vs. ZincX Resources Corp | Golden Lake vs. Nuinsco Resources Limited | Golden Lake vs. South Star Battery |
| Adriatic Metals vs. Norra Metals Corp | Adriatic Metals vs. ZincX Resources Corp | Adriatic Metals vs. Nuinsco Resources Limited | Adriatic Metals vs. South Star Battery |
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 Stocks Directory module to find actively traded stocks across global markets.
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