Correlation Between Galway Metals and Independence Gold
Can any of the company-specific risk be diversified away by investing in both Galway Metals and Independence 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 Galway Metals and Independence Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galway Metals and Independence Gold Corp, you can compare the effects of market volatilities on Galway Metals and Independence 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 Galway Metals with a short position of Independence Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galway Metals and Independence Gold.
Diversification Opportunities for Galway Metals and Independence Gold
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Galway and Independence is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Galway Metals and Independence Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Gold Corp 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 Independence Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Gold Corp has no effect on the direction of Galway Metals i.e., Galway Metals and Independence Gold go up and down completely randomly.
Pair Corralation between Galway Metals and Independence Gold
Assuming the 90 days horizon Galway Metals is expected to generate 1.32 times more return on investment than Independence Gold. However, Galway Metals is 1.32 times more volatile than Independence Gold Corp. It trades about 0.09 of its potential returns per unit of risk. Independence Gold Corp is currently generating about -0.03 per unit of risk. If you would invest 53.00 in Galway Metals on November 3, 2024 and sell it today you would earn a total of 9.00 from holding Galway Metals or generate 16.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galway Metals vs. Independence Gold Corp
Performance |
| Timeline |
| Galway Metals |
| Independence Gold Corp |
Galway Metals and Independence Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galway Metals and Independence Gold
The main advantage of trading using opposite Galway Metals and Independence Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galway Metals position performs unexpectedly, Independence 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 Independence Gold will offset losses from the drop in Independence Gold's long position.| Galway Metals vs. Cartier Resources | Galway Metals vs. Tristar Gold | Galway Metals vs. Maritime Resources Corp | Galway Metals vs. Banyan Gold Corp |
| Independence Gold vs. Kesselrun Resources | Independence Gold vs. Altiplano Metals | Independence Gold vs. Rockhaven Resources | Independence Gold vs. Magnum Goldcorp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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