Correlation Between Kootenay Silver and Bald Eagle
Can any of the company-specific risk be diversified away by investing in both Kootenay Silver and Bald Eagle 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 Kootenay Silver and Bald Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kootenay Silver and Bald Eagle Gold, you can compare the effects of market volatilities on Kootenay Silver and Bald Eagle 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 Kootenay Silver with a short position of Bald Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kootenay Silver and Bald Eagle.
Diversification Opportunities for Kootenay Silver and Bald Eagle
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kootenay and Bald is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kootenay Silver and Bald Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bald Eagle Gold and Kootenay Silver 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 Kootenay Silver are associated (or correlated) with Bald Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bald Eagle Gold has no effect on the direction of Kootenay Silver i.e., Kootenay Silver and Bald Eagle go up and down completely randomly.
Pair Corralation between Kootenay Silver and Bald Eagle
Assuming the 90 days horizon Kootenay Silver is expected to under-perform the Bald Eagle. In addition to that, Kootenay Silver is 1.54 times more volatile than Bald Eagle Gold. It trades about -0.18 of its total potential returns per unit of risk. Bald Eagle Gold is currently generating about 0.02 per unit of volatility. If you would invest 38.00 in Bald Eagle Gold on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Bald Eagle Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kootenay Silver vs. Bald Eagle Gold
Performance |
| Timeline |
| Kootenay Silver |
| Bald Eagle Gold |
Kootenay Silver and Bald Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kootenay Silver and Bald Eagle
The main advantage of trading using opposite Kootenay Silver and Bald Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kootenay Silver position performs unexpectedly, Bald Eagle 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 Bald Eagle will offset losses from the drop in Bald Eagle's long position.| Kootenay Silver vs. Ascendant Resources | Kootenay Silver vs. Cantex Mine Development | Kootenay Silver vs. Amarc Resources | Kootenay Silver vs. Sterling Metals Corp |
| Bald Eagle vs. Andean Precious Metals | Bald Eagle vs. Apollo Silver Corp | Bald Eagle vs. Silver Hammer Mining | Bald Eagle vs. Guanajuato Silver |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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