Correlation Between Grande Portage and Soma Gold
Can any of the company-specific risk be diversified away by investing in both Grande Portage and Soma 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 Soma 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 Soma Gold Corp, you can compare the effects of market volatilities on Grande Portage and Soma 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 Soma Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Portage and Soma Gold.
Diversification Opportunities for Grande Portage and Soma Gold
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grande and Soma is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Soma Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soma 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 Soma Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soma Gold Corp has no effect on the direction of Grande Portage i.e., Grande Portage and Soma Gold go up and down completely randomly.
Pair Corralation between Grande Portage and Soma Gold
Assuming the 90 days horizon Grande Portage Resources is expected to generate 1.94 times more return on investment than Soma Gold. However, Grande Portage is 1.94 times more volatile than Soma Gold Corp. It trades about 0.03 of its potential returns per unit of risk. Soma Gold Corp is currently generating about 0.0 per unit of risk. If you would invest 16.00 in Grande Portage Resources on September 12, 2024 and sell it today you would lose (1.00) from holding Grande Portage Resources or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Grande Portage Resources vs. Soma Gold Corp
Performance |
| Timeline |
| Grande Portage Resources |
| Soma Gold Corp |
Grande Portage and Soma Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Portage and Soma Gold
The main advantage of trading using opposite Grande Portage and Soma Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Portage position performs unexpectedly, Soma 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 Soma Gold will offset losses from the drop in Soma 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 |
| Soma Gold vs. Maritime Resources Corp | Soma Gold vs. Spanish Mountain Gold | Soma 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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