Correlation Between Klondike Gold and Revival Gold
Can any of the company-specific risk be diversified away by investing in both Klondike Gold and Revival 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 Revival 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 Revival Gold, you can compare the effects of market volatilities on Klondike Gold and Revival 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 Revival Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klondike Gold and Revival Gold.
Diversification Opportunities for Klondike Gold and Revival Gold
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Klondike and Revival is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Klondike Gold Corp and Revival Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revival Gold 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 Revival Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revival Gold has no effect on the direction of Klondike Gold i.e., Klondike Gold and Revival Gold go up and down completely randomly.
Pair Corralation between Klondike Gold and Revival Gold
Assuming the 90 days horizon Klondike Gold Corp is expected to under-perform the Revival Gold. In addition to that, Klondike Gold is 2.58 times more volatile than Revival Gold. It trades about -0.08 of its total potential returns per unit of risk. Revival Gold is currently generating about -0.06 per unit of volatility. If you would invest 21.00 in Revival Gold on September 13, 2024 and sell it today you would lose (1.00) from holding Revival Gold or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Klondike Gold Corp vs. Revival Gold
Performance |
| Timeline |
| Klondike Gold Corp |
| Revival Gold |
Klondike Gold and Revival Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klondike Gold and Revival Gold
The main advantage of trading using opposite Klondike Gold and Revival Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klondike Gold position performs unexpectedly, Revival 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 Revival Gold will offset losses from the drop in Revival 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 |
| Revival Gold vs. Westward Gold | Revival Gold vs. Heliostar Metals | Revival Gold vs. Cabral Gold | Revival Gold vs. Cassiar 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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