Correlation Between Independence Gold and Cabral Gold
Can any of the company-specific risk be diversified away by investing in both Independence Gold and Cabral 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 Independence Gold and Cabral Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Independence Gold Corp and Cabral Gold, you can compare the effects of market volatilities on Independence Gold and Cabral 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 Independence Gold with a short position of Cabral Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independence Gold and Cabral Gold.
Diversification Opportunities for Independence Gold and Cabral Gold
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Independence and Cabral is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Independence Gold Corp and Cabral Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabral Gold and Independence Gold 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 Independence Gold Corp are associated (or correlated) with Cabral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabral Gold has no effect on the direction of Independence Gold i.e., Independence Gold and Cabral Gold go up and down completely randomly.
Pair Corralation between Independence Gold and Cabral Gold
Assuming the 90 days horizon Independence Gold Corp is expected to under-perform the Cabral Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Independence Gold Corp is 2.22 times less risky than Cabral Gold. The otc stock trades about -0.15 of its potential returns per unit of risk. The Cabral Gold is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Cabral Gold on September 1, 2024 and sell it today you would lose (5.00) from holding Cabral Gold or give up 21.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Independence Gold Corp vs. Cabral Gold
Performance |
| Timeline |
| Independence Gold Corp |
| Cabral Gold |
Independence Gold and Cabral Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Independence Gold and Cabral Gold
The main advantage of trading using opposite Independence Gold and Cabral Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independence Gold position performs unexpectedly, Cabral 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 Cabral Gold will offset losses from the drop in Cabral Gold's long position.| Independence Gold vs. South32 Limited | Independence Gold vs. NioCorp Developments Ltd | Independence Gold vs. HUMANA INC | Independence Gold vs. SCOR PK |
| Cabral Gold vs. Puma Exploration | Cabral Gold vs. Endurance Gold | Cabral Gold vs. Red Pine Exploration | Cabral Gold vs. Fremont Gold |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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