Correlation Between Highway 50 and Galore Resources
Can any of the company-specific risk be diversified away by investing in both Highway 50 and Galore 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 Highway 50 and Galore Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway 50 Gold and Galore Resources, you can compare the effects of market volatilities on Highway 50 and Galore 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 Highway 50 with a short position of Galore Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway 50 and Galore Resources.
Diversification Opportunities for Highway 50 and Galore Resources
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Highway and Galore is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Highway 50 Gold and Galore Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galore Resources and Highway 50 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 Highway 50 Gold are associated (or correlated) with Galore Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galore Resources has no effect on the direction of Highway 50 i.e., Highway 50 and Galore Resources go up and down completely randomly.
Pair Corralation between Highway 50 and Galore Resources
Assuming the 90 days horizon Highway 50 Gold is expected to under-perform the Galore Resources. But the stock apears to be less risky and, when comparing its historical volatility, Highway 50 Gold is 5.51 times less risky than Galore Resources. The stock trades about -0.27 of its potential returns per unit of risk. The Galore Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Galore Resources on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Galore Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway 50 Gold vs. Galore Resources
Performance |
| Timeline |
| Highway 50 Gold |
| Galore Resources |
Highway 50 and Galore Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway 50 and Galore Resources
The main advantage of trading using opposite Highway 50 and Galore Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway 50 position performs unexpectedly, Galore 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 Galore Resources will offset losses from the drop in Galore Resources' long position.| Highway 50 vs. Atrium Mortgage Investment | Highway 50 vs. Bip Investment Corp | Highway 50 vs. Faction Investment Group | Highway 50 vs. American Hotel Income |
| Galore Resources vs. Nicola Mining | Galore Resources vs. Endeavour Silver Corp | Galore Resources vs. NeXGold Mining Corp | Galore Resources vs. Orbit Garant Drilling |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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