Correlation Between Gouverneur Bancorp and Harfang Exploration
Can any of the company-specific risk be diversified away by investing in both Gouverneur Bancorp and Harfang Exploration 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 Gouverneur Bancorp and Harfang Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gouverneur Bancorp and Harfang Exploration, you can compare the effects of market volatilities on Gouverneur Bancorp and Harfang Exploration 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 Gouverneur Bancorp with a short position of Harfang Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gouverneur Bancorp and Harfang Exploration.
Diversification Opportunities for Gouverneur Bancorp and Harfang Exploration
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gouverneur and Harfang is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gouverneur Bancorp and Harfang Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harfang Exploration and Gouverneur Bancorp 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 Gouverneur Bancorp are associated (or correlated) with Harfang Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harfang Exploration has no effect on the direction of Gouverneur Bancorp i.e., Gouverneur Bancorp and Harfang Exploration go up and down completely randomly.
Pair Corralation between Gouverneur Bancorp and Harfang Exploration
Given the investment horizon of 90 days Gouverneur Bancorp is expected to generate 0.57 times more return on investment than Harfang Exploration. However, Gouverneur Bancorp is 1.75 times less risky than Harfang Exploration. It trades about 0.05 of its potential returns per unit of risk. Harfang Exploration is currently generating about -0.01 per unit of risk. If you would invest 824.00 in Gouverneur Bancorp on September 1, 2024 and sell it today you would earn a total of 397.00 from holding Gouverneur Bancorp or generate 48.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 76.1% |
| Values | Daily Returns |
Gouverneur Bancorp vs. Harfang Exploration
Performance |
| Timeline |
| Gouverneur Bancorp |
| Harfang Exploration |
Gouverneur Bancorp and Harfang Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gouverneur Bancorp and Harfang Exploration
The main advantage of trading using opposite Gouverneur Bancorp and Harfang Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gouverneur Bancorp position performs unexpectedly, Harfang Exploration 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 Harfang Exploration will offset losses from the drop in Harfang Exploration's long position.The idea behind Gouverneur Bancorp and Harfang Exploration pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Harfang Exploration vs. Champion Bear Resources | Harfang Exploration vs. Edison Cobalt Corp | Harfang Exploration vs. Aurelia Metals Limited | Harfang Exploration vs. Fury Gold Mines |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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