Correlation Between Kootenay Silver and Strikepoint Gold
Can any of the company-specific risk be diversified away by investing in both Kootenay Silver and Strikepoint 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 Kootenay Silver and Strikepoint Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kootenay Silver and Strikepoint Gold, you can compare the effects of market volatilities on Kootenay Silver and Strikepoint 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 Kootenay Silver with a short position of Strikepoint Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kootenay Silver and Strikepoint Gold.
Diversification Opportunities for Kootenay Silver and Strikepoint Gold
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kootenay and Strikepoint is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kootenay Silver and Strikepoint Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strikepoint 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 Strikepoint Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strikepoint Gold has no effect on the direction of Kootenay Silver i.e., Kootenay Silver and Strikepoint Gold go up and down completely randomly.
Pair Corralation between Kootenay Silver and Strikepoint Gold
Assuming the 90 days horizon Kootenay Silver is expected to generate 0.39 times more return on investment than Strikepoint Gold. However, Kootenay Silver is 2.55 times less risky than Strikepoint Gold. It trades about -0.31 of its potential returns per unit of risk. Strikepoint Gold is currently generating about -0.28 per unit of risk. If you would invest 144.00 in Kootenay Silver on August 29, 2024 and sell it today you would lose (37.00) from holding Kootenay Silver or give up 25.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kootenay Silver vs. Strikepoint Gold
Performance |
| Timeline |
| Kootenay Silver |
| Strikepoint Gold |
Kootenay Silver and Strikepoint Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kootenay Silver and Strikepoint Gold
The main advantage of trading using opposite Kootenay Silver and Strikepoint Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kootenay Silver position performs unexpectedly, Strikepoint 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 Strikepoint Gold will offset losses from the drop in Strikepoint Gold's long position.The idea behind Kootenay Silver and Strikepoint Gold 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.| Strikepoint Gold vs. First Majestic Silver | Strikepoint Gold vs. Ivanhoe Energy | Strikepoint Gold vs. Orezone Gold Corp | Strikepoint Gold 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |