Correlation Between Grande Portage and Magna Mining
Can any of the company-specific risk be diversified away by investing in both Grande Portage and Magna Mining 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 Magna Mining 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 Magna Mining, you can compare the effects of market volatilities on Grande Portage and Magna Mining 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 Magna Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Portage and Magna Mining.
Diversification Opportunities for Grande Portage and Magna Mining
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grande and Magna is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Magna Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna Mining 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 Magna Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna Mining has no effect on the direction of Grande Portage i.e., Grande Portage and Magna Mining go up and down completely randomly.
Pair Corralation between Grande Portage and Magna Mining
Assuming the 90 days horizon Grande Portage Resources is expected to under-perform the Magna Mining. In addition to that, Grande Portage is 1.36 times more volatile than Magna Mining. It trades about -0.14 of its total potential returns per unit of risk. Magna Mining is currently generating about 0.01 per unit of volatility. If you would invest 146.00 in Magna Mining on September 25, 2024 and sell it today you would lose (1.00) from holding Magna Mining or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grande Portage Resources vs. Magna Mining
Performance |
| Timeline |
| Grande Portage Resources |
| Magna Mining |
Grande Portage and Magna Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Portage and Magna Mining
The main advantage of trading using opposite Grande Portage and Magna Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Portage position performs unexpectedly, Magna Mining 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 Magna Mining will offset losses from the drop in Magna Mining's long position.| Grande Portage vs. Wildsky Resources | Grande Portage vs. Q Gold Resources | Grande Portage vs. Plato Gold Corp | Grande Portage vs. MAS Gold Corp |
| Magna Mining vs. Monarca Minerals | Magna Mining vs. Outcrop Gold Corp | Magna Mining vs. Grande Portage Resources | Magna Mining vs. Klondike Silver 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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