Correlation Between Grande Portage and Klondike Gold
Can any of the company-specific risk be diversified away by investing in both Grande Portage and Klondike 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 Grande Portage and Klondike Gold 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 Klondike Gold Corp, you can compare the effects of market volatilities on Grande Portage and Klondike 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 Grande Portage with a short position of Klondike Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Portage and Klondike Gold.
Diversification Opportunities for Grande Portage and Klondike Gold
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grande and Klondike is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Klondike Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Gold Corp 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 Klondike Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Gold Corp has no effect on the direction of Grande Portage i.e., Grande Portage and Klondike Gold go up and down completely randomly.
Pair Corralation between Grande Portage and Klondike Gold
Assuming the 90 days horizon Grande Portage Resources is expected to generate 0.29 times more return on investment than Klondike Gold. However, Grande Portage Resources is 3.4 times less risky than Klondike Gold. It trades about 0.12 of its potential returns per unit of risk. Klondike Gold Corp is currently generating about -0.01 per unit of risk. If you would invest 13.00 in Grande Portage Resources on November 5, 2024 and sell it today you would earn a total of 1.00 from holding Grande Portage Resources or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grande Portage Resources vs. Klondike Gold Corp
Performance |
| Timeline |
| Grande Portage Resources |
| Klondike Gold Corp |
Grande Portage and Klondike Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Portage and Klondike Gold
The main advantage of trading using opposite Grande Portage and Klondike Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Portage position performs unexpectedly, Klondike 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 Klondike Gold will offset losses from the drop in Klondike Gold's long position.| Grande Portage vs. Puma Exploration | Grande Portage vs. Sixty North Gold | Grande Portage vs. Red Pine Exploration | Grande Portage vs. Altamira Gold Corp |
| Klondike Gold vs. Puma Exploration | Klondike Gold vs. Sixty North Gold | Klondike Gold vs. Red Pine Exploration | Klondike Gold vs. Grande Portage Resources |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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