Correlation Between Karora Resources and Contango ORE
Can any of the company-specific risk be diversified away by investing in both Karora Resources and Contango ORE 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 Karora Resources and Contango ORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karora Resources and Contango ORE, you can compare the effects of market volatilities on Karora Resources and Contango ORE 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 Karora Resources with a short position of Contango ORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karora Resources and Contango ORE.
Diversification Opportunities for Karora Resources and Contango ORE
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Karora and Contango is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Karora Resources and Contango ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contango ORE and Karora 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 Karora Resources are associated (or correlated) with Contango ORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contango ORE has no effect on the direction of Karora Resources i.e., Karora Resources and Contango ORE go up and down completely randomly.
Pair Corralation between Karora Resources and Contango ORE
Assuming the 90 days horizon Karora Resources is expected to generate 0.62 times more return on investment than Contango ORE. However, Karora Resources is 1.61 times less risky than Contango ORE. It trades about 0.06 of its potential returns per unit of risk. Contango ORE is currently generating about -0.03 per unit of risk. If you would invest 346.00 in Karora Resources on August 31, 2024 and sell it today you would earn a total of 137.00 from holding Karora Resources or generate 39.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.81% |
| Values | Daily Returns |
Karora Resources vs. Contango ORE
Performance |
| Timeline |
| Karora Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Contango ORE |
Karora Resources and Contango ORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karora Resources and Contango ORE
The main advantage of trading using opposite Karora Resources and Contango ORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karora Resources position performs unexpectedly, Contango ORE 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 Contango ORE will offset losses from the drop in Contango ORE's long position.| Karora Resources vs. K92 Mining | Karora Resources vs. I 80 Gold Corp | Karora Resources vs. Wesdome Gold Mines | Karora Resources vs. GGX Gold Corp |
| Contango ORE vs. Monarch Mining | Contango ORE vs. First Guaranty Bancshares | Contango ORE vs. Glen Burnie Bancorp | Contango ORE vs. Princeton Capital |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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