Correlation Between Klondike Gold and Japan Gold
Can any of the company-specific risk be diversified away by investing in both Klondike Gold and Japan 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 Klondike Gold and Japan Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klondike Gold Corp and Japan Gold Corp, you can compare the effects of market volatilities on Klondike Gold and Japan 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 Klondike Gold with a short position of Japan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klondike Gold and Japan Gold.
Diversification Opportunities for Klondike Gold and Japan Gold
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Klondike and Japan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Klondike Gold Corp and Japan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Gold Corp and Klondike 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 Klondike Gold Corp are associated (or correlated) with Japan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Gold Corp has no effect on the direction of Klondike Gold i.e., Klondike Gold and Japan Gold go up and down completely randomly.
Pair Corralation between Klondike Gold and Japan Gold
Assuming the 90 days horizon Klondike Gold Corp is expected to generate 1.12 times more return on investment than Japan Gold. However, Klondike Gold is 1.12 times more volatile than Japan Gold Corp. It trades about 0.03 of its potential returns per unit of risk. Japan Gold Corp is currently generating about 0.03 per unit of risk. If you would invest 5.00 in Klondike Gold Corp on August 29, 2024 and sell it today you would lose (0.40) from holding Klondike Gold Corp or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Klondike Gold Corp vs. Japan Gold Corp
Performance |
| Timeline |
| Klondike Gold Corp |
| Japan Gold Corp |
Klondike Gold and Japan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klondike Gold and Japan Gold
The main advantage of trading using opposite Klondike Gold and Japan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klondike Gold position performs unexpectedly, Japan 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 Japan Gold will offset losses from the drop in Japan Gold's long position.| Klondike Gold vs. Puma Exploration | Klondike Gold vs. Sixty North Gold | Klondike Gold vs. Red Pine Exploration | Klondike Gold vs. Grande Portage Resources |
| Japan Gold vs. Vertiv Holdings Co | Japan Gold vs. Nasdaq Inc | Japan Gold vs. McDonalds | Japan Gold vs. Walmart |
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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