Correlation Between Grande Portage and Palamina Corp
Can any of the company-specific risk be diversified away by investing in both Grande Portage and Palamina Corp 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 Palamina Corp 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 Palamina Corp, you can compare the effects of market volatilities on Grande Portage and Palamina Corp 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 Palamina Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Portage and Palamina Corp.
Diversification Opportunities for Grande Portage and Palamina Corp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grande and Palamina is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Palamina Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palamina 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 Palamina Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palamina Corp has no effect on the direction of Grande Portage i.e., Grande Portage and Palamina Corp go up and down completely randomly.
Pair Corralation between Grande Portage and Palamina Corp
Assuming the 90 days horizon Grande Portage is expected to generate 1.63 times less return on investment than Palamina Corp. But when comparing it to its historical volatility, Grande Portage Resources is 1.16 times less risky than Palamina Corp. It trades about 0.04 of its potential returns per unit of risk. Palamina Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.10 in Palamina Corp on September 3, 2024 and sell it today you would earn a total of 3.17 from holding Palamina Corp or generate 51.97% 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. Palamina Corp
Performance |
| Timeline |
| Grande Portage Resources |
| Palamina Corp |
Grande Portage and Palamina Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Portage and Palamina Corp
The main advantage of trading using opposite Grande Portage and Palamina Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Portage position performs unexpectedly, Palamina Corp 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 Palamina Corp will offset losses from the drop in Palamina Corp'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 |
| Palamina Corp vs. Gold Springs Resource | Palamina Corp vs. BTU Metals Corp | Palamina Corp vs. Norsemont Mining | Palamina Corp vs. FireFox Gold 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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