Correlation Between Alphabet and Maple Gold
Can any of the company-specific risk be diversified away by investing in both Alphabet and Maple 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 Alphabet and Maple Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc CDR and Maple Gold Mines, you can compare the effects of market volatilities on Alphabet and Maple 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 Alphabet with a short position of Maple Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Maple Gold.
Diversification Opportunities for Alphabet and Maple Gold
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alphabet and Maple is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc CDR and Maple Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Gold Mines and Alphabet 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 Alphabet Inc CDR are associated (or correlated) with Maple Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Gold Mines has no effect on the direction of Alphabet i.e., Alphabet and Maple Gold go up and down completely randomly.
Pair Corralation between Alphabet and Maple Gold
Assuming the 90 days trading horizon Alphabet is expected to generate 2.69 times less return on investment than Maple Gold. But when comparing it to its historical volatility, Alphabet Inc CDR is 4.01 times less risky than Maple Gold. It trades about 0.06 of its potential returns per unit of risk. Maple Gold Mines is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5.50 in Maple Gold Mines on August 29, 2024 and sell it today you would earn a total of 0.50 from holding Maple Gold Mines or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc CDR vs. Maple Gold Mines
Performance |
| Timeline |
| Alphabet CDR |
| Maple Gold Mines |
Alphabet and Maple Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Maple Gold
The main advantage of trading using opposite Alphabet and Maple Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Maple 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 Maple Gold will offset losses from the drop in Maple Gold's long position.| Alphabet vs. Questor Technology | Alphabet vs. Renoworks Software | Alphabet vs. NeXGold Mining Corp | Alphabet vs. T2 Metals Corp |
| Maple Gold vs. Liberty Gold Corp | Maple Gold vs. Cartier Resources | Maple Gold vs. Banyan Gold Corp | Maple Gold vs. Maritime Resources 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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