Correlation Between Klondike Gold and Gold79 Mines
Can any of the company-specific risk be diversified away by investing in both Klondike Gold and Gold79 Mines 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 Gold79 Mines 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 Gold79 Mines, you can compare the effects of market volatilities on Klondike Gold and Gold79 Mines 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 Gold79 Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klondike Gold and Gold79 Mines.
Diversification Opportunities for Klondike Gold and Gold79 Mines
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Klondike and Gold79 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Klondike Gold Corp and Gold79 Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold79 Mines 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 Gold79 Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold79 Mines has no effect on the direction of Klondike Gold i.e., Klondike Gold and Gold79 Mines go up and down completely randomly.
Pair Corralation between Klondike Gold and Gold79 Mines
Given the investment horizon of 90 days Klondike Gold Corp is expected to under-perform the Gold79 Mines. In addition to that, Klondike Gold is 1.03 times more volatile than Gold79 Mines. It trades about -0.18 of its total potential returns per unit of risk. Gold79 Mines is currently generating about 0.15 per unit of volatility. If you would invest 28.00 in Gold79 Mines on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Gold79 Mines or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Klondike Gold Corp vs. Gold79 Mines
Performance |
| Timeline |
| Klondike Gold Corp |
| Gold79 Mines |
Klondike Gold and Gold79 Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klondike Gold and Gold79 Mines
The main advantage of trading using opposite Klondike Gold and Gold79 Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klondike Gold position performs unexpectedly, Gold79 Mines 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 Gold79 Mines will offset losses from the drop in Gold79 Mines' long position.The idea behind Klondike Gold Corp and Gold79 Mines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Gold79 Mines vs. First Majestic Silver | Gold79 Mines vs. Ivanhoe Energy | Gold79 Mines vs. Orezone Gold Corp | Gold79 Mines vs. Faraday Copper 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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