Correlation Between Gold Royalty and Compania
Can any of the company-specific risk be diversified away by investing in both Gold Royalty and Compania 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 Gold Royalty and Compania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Royalty Corp and Compania de Minas, you can compare the effects of market volatilities on Gold Royalty and Compania 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 Gold Royalty with a short position of Compania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Royalty and Compania.
Diversification Opportunities for Gold Royalty and Compania
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gold and Compania is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Gold Royalty Corp and Compania de Minas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania de Minas and Gold Royalty 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 Gold Royalty Corp are associated (or correlated) with Compania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania de Minas has no effect on the direction of Gold Royalty i.e., Gold Royalty and Compania go up and down completely randomly.
Pair Corralation between Gold Royalty and Compania
Given the investment horizon of 90 days Gold Royalty Corp is expected to under-perform the Compania. In addition to that, Gold Royalty is 1.25 times more volatile than Compania de Minas. It trades about -0.3 of its total potential returns per unit of risk. Compania de Minas is currently generating about -0.2 per unit of volatility. If you would invest 1,315 in Compania de Minas on August 28, 2024 and sell it today you would lose (115.00) from holding Compania de Minas or give up 8.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Royalty Corp vs. Compania de Minas
Performance |
| Timeline |
| Gold Royalty Corp |
| Compania de Minas |
Gold Royalty and Compania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Royalty and Compania
The main advantage of trading using opposite Gold Royalty and Compania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Royalty position performs unexpectedly, Compania 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 Compania will offset losses from the drop in Compania's long position.| Gold Royalty vs. Endeavour Silver Corp | Gold Royalty vs. SilverCrest Metals | Gold Royalty vs. Platinum Group Metals | Gold Royalty vs. New Pacific Metals |
| Compania vs. Gold Royalty Corp | Compania vs. SilverCrest Metals | Compania vs. Hecla Mining | Compania vs. Avino Silver Gold |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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