Correlation Between Grande Portage and Lavras Gold
Can any of the company-specific risk be diversified away by investing in both Grande Portage and Lavras 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 Lavras 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 Lavras Gold Corp, you can compare the effects of market volatilities on Grande Portage and Lavras 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 Lavras Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Portage and Lavras Gold.
Diversification Opportunities for Grande Portage and Lavras Gold
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grande and Lavras is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Lavras Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavras 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 Lavras Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavras Gold Corp has no effect on the direction of Grande Portage i.e., Grande Portage and Lavras Gold go up and down completely randomly.
Pair Corralation between Grande Portage and Lavras Gold
Assuming the 90 days horizon Grande Portage Resources is expected to generate 2.28 times more return on investment than Lavras Gold. However, Grande Portage is 2.28 times more volatile than Lavras Gold Corp. It trades about 0.09 of its potential returns per unit of risk. Lavras Gold Corp is currently generating about -0.01 per unit of risk. If you would invest 12.00 in Grande Portage Resources on November 27, 2024 and sell it today you would earn a total of 1.00 from holding Grande Portage Resources or generate 8.33% 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. Lavras Gold Corp
Performance |
| Timeline |
| Grande Portage Resources |
| Lavras Gold Corp |
Grande Portage and Lavras Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Portage and Lavras Gold
The main advantage of trading using opposite Grande Portage and Lavras Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Portage position performs unexpectedly, Lavras 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 Lavras Gold will offset losses from the drop in Lavras 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 |
| Lavras Gold vs. TRU Precious Metals | Lavras Gold vs. Orefinders Resources | Lavras Gold vs. North Peak Resources | Lavras Gold vs. Nine Mile Metals |
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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