Correlation Between K92 Mining and Dynacor Gold
Can any of the company-specific risk be diversified away by investing in both K92 Mining and Dynacor 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 K92 Mining and Dynacor Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K92 Mining and Dynacor Gold Mines, you can compare the effects of market volatilities on K92 Mining and Dynacor 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 K92 Mining with a short position of Dynacor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of K92 Mining and Dynacor Gold.
Diversification Opportunities for K92 Mining and Dynacor Gold
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between K92 and Dynacor is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding K92 Mining and Dynacor Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynacor Gold Mines and K92 Mining 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 K92 Mining are associated (or correlated) with Dynacor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynacor Gold Mines has no effect on the direction of K92 Mining i.e., K92 Mining and Dynacor Gold go up and down completely randomly.
Pair Corralation between K92 Mining and Dynacor Gold
Assuming the 90 days horizon K92 Mining is expected to generate 3.72 times less return on investment than Dynacor Gold. But when comparing it to its historical volatility, K92 Mining is 1.18 times less risky than Dynacor Gold. It trades about 0.02 of its potential returns per unit of risk. Dynacor Gold Mines is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 211.00 in Dynacor Gold Mines on August 30, 2024 and sell it today you would earn a total of 222.00 from holding Dynacor Gold Mines or generate 105.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 89.7% |
| Values | Daily Returns |
K92 Mining vs. Dynacor Gold Mines
Performance |
| Timeline |
| K92 Mining |
| Dynacor Gold Mines |
K92 Mining and Dynacor Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K92 Mining and Dynacor Gold
The main advantage of trading using opposite K92 Mining and Dynacor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K92 Mining position performs unexpectedly, Dynacor 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 Dynacor Gold will offset losses from the drop in Dynacor Gold's long position.| K92 Mining vs. I 80 Gold Corp | K92 Mining vs. Equinox Gold Corp | K92 Mining vs. Contango ORE | K92 Mining vs. Orla Mining |
| Dynacor Gold vs. Silver Hammer Mining | Dynacor Gold vs. Reyna Silver Corp | Dynacor Gold vs. Guanajuato Silver | Dynacor Gold vs. Silver One Resources |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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