Correlation Between Grande Portage and New Age
Can any of the company-specific risk be diversified away by investing in both Grande Portage and New Age 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 New Age 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 New Age Metals, you can compare the effects of market volatilities on Grande Portage and New Age 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 New Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Portage and New Age.
Diversification Opportunities for Grande Portage and New Age
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grande and New is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and New Age Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Age Metals 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 New Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Age Metals has no effect on the direction of Grande Portage i.e., Grande Portage and New Age go up and down completely randomly.
Pair Corralation between Grande Portage and New Age
Assuming the 90 days horizon Grande Portage Resources is expected to generate 0.63 times more return on investment than New Age. However, Grande Portage Resources is 1.59 times less risky than New Age. It trades about 0.04 of its potential returns per unit of risk. New Age Metals is currently generating about 0.03 per unit of risk. If you would invest 18.00 in Grande Portage Resources on August 29, 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. New Age Metals
Performance |
| Timeline |
| Grande Portage Resources |
| New Age Metals |
Grande Portage and New Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Portage and New Age
The main advantage of trading using opposite Grande Portage and New Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Portage position performs unexpectedly, New Age 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 New Age will offset losses from the drop in New Age's long position.| Grande Portage vs. First Majestic Silver | Grande Portage vs. Ivanhoe Energy | Grande Portage vs. Orezone Gold Corp | Grande Portage vs. Faraday Copper Corp |
| New Age vs. Stillwater Critical Minerals | New Age vs. Grid Metals Corp | New Age vs. Kore Mining | New Age vs. Imagine Lithium |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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