Correlation Between Galway Metals and Cartier Resources
Can any of the company-specific risk be diversified away by investing in both Galway Metals and Cartier Resources 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 Galway Metals and Cartier Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galway Metals and Cartier Resources, you can compare the effects of market volatilities on Galway Metals and Cartier Resources 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 Galway Metals with a short position of Cartier Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galway Metals and Cartier Resources.
Diversification Opportunities for Galway Metals and Cartier Resources
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Galway and Cartier is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Galway Metals and Cartier Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartier Resources and Galway Metals 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 Galway Metals are associated (or correlated) with Cartier Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartier Resources has no effect on the direction of Galway Metals i.e., Galway Metals and Cartier Resources go up and down completely randomly.
Pair Corralation between Galway Metals and Cartier Resources
Assuming the 90 days horizon Galway Metals is expected to generate 1.48 times more return on investment than Cartier Resources. However, Galway Metals is 1.48 times more volatile than Cartier Resources. It trades about -0.18 of its potential returns per unit of risk. Cartier Resources is currently generating about -0.29 per unit of risk. If you would invest 61.00 in Galway Metals on August 29, 2024 and sell it today you would lose (15.00) from holding Galway Metals or give up 24.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galway Metals vs. Cartier Resources
Performance |
| Timeline |
| Galway Metals |
| Cartier Resources |
Galway Metals and Cartier Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galway Metals and Cartier Resources
The main advantage of trading using opposite Galway Metals and Cartier Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galway Metals position performs unexpectedly, Cartier Resources 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 Cartier Resources will offset losses from the drop in Cartier Resources' long position.| Galway Metals vs. First Majestic Silver | Galway Metals vs. Ivanhoe Energy | Galway Metals vs. Orezone Gold Corp | Galway Metals vs. Faraday Copper Corp |
| Cartier Resources vs. First Majestic Silver | Cartier Resources vs. Ivanhoe Energy | Cartier Resources vs. Orezone Gold Corp | Cartier Resources vs. Faraday Copper 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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