Correlation Between Guanajuato Silver and KAT Exploration
Can any of the company-specific risk be diversified away by investing in both Guanajuato Silver and KAT Exploration 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 Guanajuato Silver and KAT Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guanajuato Silver and KAT Exploration, you can compare the effects of market volatilities on Guanajuato Silver and KAT Exploration 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 Guanajuato Silver with a short position of KAT Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guanajuato Silver and KAT Exploration.
Diversification Opportunities for Guanajuato Silver and KAT Exploration
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guanajuato and KAT is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Guanajuato Silver and KAT Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAT Exploration and Guanajuato Silver 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 Guanajuato Silver are associated (or correlated) with KAT Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAT Exploration has no effect on the direction of Guanajuato Silver i.e., Guanajuato Silver and KAT Exploration go up and down completely randomly.
Pair Corralation between Guanajuato Silver and KAT Exploration
Assuming the 90 days horizon Guanajuato Silver is expected to generate 0.94 times more return on investment than KAT Exploration. However, Guanajuato Silver is 1.07 times less risky than KAT Exploration. It trades about 0.02 of its potential returns per unit of risk. KAT Exploration is currently generating about -0.21 per unit of risk. If you would invest 12.00 in Guanajuato Silver on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Guanajuato Silver or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guanajuato Silver vs. KAT Exploration
Performance |
| Timeline |
| Guanajuato Silver |
| KAT Exploration |
Guanajuato Silver and KAT Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guanajuato Silver and KAT Exploration
The main advantage of trading using opposite Guanajuato Silver and KAT Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guanajuato Silver position performs unexpectedly, KAT Exploration 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 KAT Exploration will offset losses from the drop in KAT Exploration's long position.| Guanajuato Silver vs. Aya Gold Silver | Guanajuato Silver vs. Andean Precious Metals | Guanajuato Silver vs. Dolly Varden Silver | Guanajuato Silver vs. MAG Silver Corp |
| KAT Exploration vs. Southern ITS International | KAT Exploration vs. UHF Logistics Group | KAT Exploration vs. Intl Star | KAT Exploration vs. Church Crawford |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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