Correlation Between Labrador Gold and GoldMining
Can any of the company-specific risk be diversified away by investing in both Labrador Gold and GoldMining 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 Labrador Gold and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labrador Gold Corp and GoldMining, you can compare the effects of market volatilities on Labrador Gold and GoldMining 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 Labrador Gold with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labrador Gold and GoldMining.
Diversification Opportunities for Labrador Gold and GoldMining
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Labrador and GoldMining is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Labrador Gold Corp and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Labrador 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 Labrador Gold Corp are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Labrador Gold i.e., Labrador Gold and GoldMining go up and down completely randomly.
Pair Corralation between Labrador Gold and GoldMining
Assuming the 90 days horizon Labrador Gold Corp is expected to under-perform the GoldMining. In addition to that, Labrador Gold is 1.6 times more volatile than GoldMining. It trades about -0.19 of its total potential returns per unit of risk. GoldMining is currently generating about -0.05 per unit of volatility. If you would invest 130.00 in GoldMining on August 31, 2024 and sell it today you would lose (5.00) from holding GoldMining or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labrador Gold Corp vs. GoldMining
Performance |
| Timeline |
| Labrador Gold Corp |
| GoldMining |
Labrador Gold and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labrador Gold and GoldMining
The main advantage of trading using opposite Labrador Gold and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labrador Gold position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Labrador Gold vs. UnitedHealth Group CDR | Labrador Gold vs. Quisitive Technology Solutions | Labrador Gold vs. Sangoma Technologies Corp | Labrador Gold vs. Ocumetics Technology Corp |
| GoldMining vs. First Mining Gold | GoldMining vs. Liberty Gold Corp | GoldMining vs. Equinox Gold Corp | GoldMining vs. SilverCrest Metals |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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