Correlation Between Kesselrun Resources and Magnum Goldcorp
Can any of the company-specific risk be diversified away by investing in both Kesselrun Resources and Magnum Goldcorp 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 Kesselrun Resources and Magnum Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kesselrun Resources and Magnum Goldcorp, you can compare the effects of market volatilities on Kesselrun Resources and Magnum Goldcorp 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 Kesselrun Resources with a short position of Magnum Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kesselrun Resources and Magnum Goldcorp.
Diversification Opportunities for Kesselrun Resources and Magnum Goldcorp
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kesselrun and Magnum is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kesselrun Resources and Magnum Goldcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnum Goldcorp and Kesselrun Resources 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 Kesselrun Resources are associated (or correlated) with Magnum Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnum Goldcorp has no effect on the direction of Kesselrun Resources i.e., Kesselrun Resources and Magnum Goldcorp go up and down completely randomly.
Pair Corralation between Kesselrun Resources and Magnum Goldcorp
Assuming the 90 days horizon Kesselrun Resources is expected to generate 2.56 times less return on investment than Magnum Goldcorp. But when comparing it to its historical volatility, Kesselrun Resources is 1.92 times less risky than Magnum Goldcorp. It trades about 0.05 of its potential returns per unit of risk. Magnum Goldcorp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Magnum Goldcorp on September 2, 2024 and sell it today you would lose (5.00) from holding Magnum Goldcorp or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Kesselrun Resources vs. Magnum Goldcorp
Performance |
| Timeline |
| Kesselrun Resources |
| Magnum Goldcorp |
Kesselrun Resources and Magnum Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kesselrun Resources and Magnum Goldcorp
The main advantage of trading using opposite Kesselrun Resources and Magnum Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kesselrun Resources position performs unexpectedly, Magnum Goldcorp 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 Magnum Goldcorp will offset losses from the drop in Magnum Goldcorp's long position.| Kesselrun Resources vs. First Majestic Silver | Kesselrun Resources vs. Ivanhoe Energy | Kesselrun Resources vs. Orezone Gold Corp | Kesselrun Resources vs. Faraday Copper Corp |
| Magnum Goldcorp vs. QC Copper and | Magnum Goldcorp vs. Metalero Mining Corp | Magnum Goldcorp vs. Mako Mining Corp | Magnum Goldcorp vs. SalesforceCom CDR |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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