Correlation Between Japan Gold and Hummingbird Resources
Can any of the company-specific risk be diversified away by investing in both Japan Gold and Hummingbird 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 Japan Gold and Hummingbird Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Gold Corp and Hummingbird Resources PLC, you can compare the effects of market volatilities on Japan Gold and Hummingbird 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 Japan Gold with a short position of Hummingbird Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Gold and Hummingbird Resources.
Diversification Opportunities for Japan Gold and Hummingbird Resources
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Japan and Hummingbird is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Japan Gold Corp and Hummingbird Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hummingbird Resources PLC and Japan 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 Japan Gold Corp are associated (or correlated) with Hummingbird Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hummingbird Resources PLC has no effect on the direction of Japan Gold i.e., Japan Gold and Hummingbird Resources go up and down completely randomly.
Pair Corralation between Japan Gold and Hummingbird Resources
Assuming the 90 days horizon Japan Gold Corp is expected to generate 0.37 times more return on investment than Hummingbird Resources. However, Japan Gold Corp is 2.72 times less risky than Hummingbird Resources. It trades about -0.02 of its potential returns per unit of risk. Hummingbird Resources PLC is currently generating about -0.23 per unit of risk. If you would invest 5.80 in Japan Gold Corp on September 1, 2024 and sell it today you would lose (0.40) from holding Japan Gold Corp or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Gold Corp vs. Hummingbird Resources PLC
Performance |
| Timeline |
| Japan Gold Corp |
| Hummingbird Resources PLC |
Japan Gold and Hummingbird Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Gold and Hummingbird Resources
The main advantage of trading using opposite Japan Gold and Hummingbird Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Gold position performs unexpectedly, Hummingbird 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 Hummingbird Resources will offset losses from the drop in Hummingbird Resources' long position.| Japan Gold vs. Aurion Resources | Japan Gold vs. Rio2 Limited | Japan Gold vs. Palamina Corp | Japan Gold vs. BTU Metals Corp |
| Hummingbird Resources vs. Fremont Gold | Hummingbird Resources vs. Norsemont Mining | Hummingbird Resources vs. Tudor Gold Corp | Hummingbird Resources vs. Japan Gold 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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