Correlation Between Grande Portage and Erdene Resource
Can any of the company-specific risk be diversified away by investing in both Grande Portage and Erdene Resource 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 Grande Portage and Erdene Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grande Portage Resources and Erdene Resource Development, you can compare the effects of market volatilities on Grande Portage and Erdene Resource 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 Grande Portage with a short position of Erdene Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Portage and Erdene Resource.
Diversification Opportunities for Grande Portage and Erdene Resource
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grande and Erdene is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Erdene Resource Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erdene Resource Deve and Grande Portage 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 Grande Portage Resources are associated (or correlated) with Erdene Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erdene Resource Deve has no effect on the direction of Grande Portage i.e., Grande Portage and Erdene Resource go up and down completely randomly.
Pair Corralation between Grande Portage and Erdene Resource
Assuming the 90 days horizon Grande Portage Resources is expected to generate 2.11 times more return on investment than Erdene Resource. However, Grande Portage is 2.11 times more volatile than Erdene Resource Development. It trades about 0.06 of its potential returns per unit of risk. Erdene Resource Development is currently generating about 0.07 per unit of risk. If you would invest 18.00 in Grande Portage Resources on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Grande Portage Resources or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grande Portage Resources vs. Erdene Resource Development
Performance |
| Timeline |
| Grande Portage Resources |
| Erdene Resource Deve |
Grande Portage and Erdene Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Portage and Erdene Resource
The main advantage of trading using opposite Grande Portage and Erdene Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Portage position performs unexpectedly, Erdene Resource 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 Erdene Resource will offset losses from the drop in Erdene Resource's long position.| Grande Portage vs. Galantas Gold Corp | Grande Portage vs. Strikepoint Gold | Grande Portage vs. Kore Mining | Grande Portage vs. Outcrop Gold Corp |
| Erdene Resource vs. Algoma Steel Group | Erdene Resource vs. Champion Iron | Erdene Resource vs. International Zeolite Corp | Erdene Resource vs. European Residential Real |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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