Correlation Between SPTSX Dividend and Klondike Gold

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Can any of the company-specific risk be diversified away by investing in both SPTSX Dividend 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 SPTSX Dividend and Klondike Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPTSX Dividend Aristocrats and Klondike Gold Corp, you can compare the effects of market volatilities on SPTSX Dividend 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 SPTSX Dividend with a short position of Klondike Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and Klondike Gold.

Diversification Opportunities for SPTSX Dividend and Klondike Gold

-0.73

Correlation Coefficient

SPTSX Dividend

Klondike Gold

Pay attention - limited upside

The 3 months correlation between SPTSX and Klondike is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats 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 SPTSX Dividend 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 SPTSX Dividend Aristocrats 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 SPTSX Dividend i.e., SPTSX Dividend and Klondike Gold go up and down completely randomly.

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Pair Corralation between SPTSX Dividend and Klondike Gold

Assuming the 90 days trading horizon SPTSX Dividend Aristocrats is expected to generate 0.1 times more return on investment than Klondike Gold. However, SPTSX Dividend Aristocrats is 10.15 times less risky than Klondike Gold. It trades about 0.15 of its potential returns per unit of risk. Klondike Gold Corp is currently generating about -0.18 per unit of risk. If you would invest 36,732 in SPTSX Dividend Aristocrats on August 29, 2024 and sell it today you would earn a total of 558.00 from holding SPTSX Dividend Aristocrats or generate 1.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SPTSX Dividend Aristocrats vs. Klondike Gold Corp

Performance

Timeline

SPTSX Dividend and Klondike Gold Volatility Contrast

Predicted Return Density

Returns

SPTSX Dividend Aristocrats

Pair trading matchups for SPTSX Dividend

	SPTSX Dividend vs. High Liner Foods
	SPTSX Dividend vs. TUT Fitness Group
	SPTSX Dividend vs. MTY Food Group
	SPTSX Dividend vs. UnitedHealth Group CDR

Klondike Gold Corp

Pair trading matchups for Klondike Gold

	Klondike Gold vs. First Majestic Silver
	Klondike Gold vs. Ivanhoe Energy

Pair Trading with SPTSX Dividend and Klondike Gold

The main advantage of trading using opposite SPTSX Dividend and Klondike Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend 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.

	SPTSX Dividend vs. High Liner Foods
	SPTSX Dividend vs. TUT Fitness Group
	SPTSX Dividend vs. MTY Food Group
	SPTSX Dividend vs. UnitedHealth Group CDR

The idea behind SPTSX Dividend Aristocrats and Klondike Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

	Klondike Gold vs. First Majestic Silver
	Klondike Gold vs. Ivanhoe Energy

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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