Correlation Between Lavras Gold and Angkor Resources
Can any of the company-specific risk be diversified away by investing in both Lavras Gold and Angkor Resources 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 Lavras Gold and Angkor Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lavras Gold Corp and Angkor Resources Corp, you can compare the effects of market volatilities on Lavras Gold and Angkor Resources 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 Lavras Gold with a short position of Angkor Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lavras Gold and Angkor Resources.
Diversification Opportunities for Lavras Gold and Angkor Resources
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lavras and Angkor is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lavras Gold Corp and Angkor Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angkor Resources Corp and Lavras 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 Lavras Gold Corp are associated (or correlated) with Angkor Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angkor Resources Corp has no effect on the direction of Lavras Gold i.e., Lavras Gold and Angkor Resources go up and down completely randomly.
Pair Corralation between Lavras Gold and Angkor Resources
Assuming the 90 days horizon Lavras Gold is expected to generate 3.45 times less return on investment than Angkor Resources. In addition to that, Lavras Gold is 1.06 times more volatile than Angkor Resources Corp. It trades about 0.04 of its total potential returns per unit of risk. Angkor Resources Corp is currently generating about 0.16 per unit of volatility. If you would invest 6.60 in Angkor Resources Corp on November 3, 2024 and sell it today you would earn a total of 1.19 from holding Angkor Resources Corp or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lavras Gold Corp vs. Angkor Resources Corp
Performance |
| Timeline |
| Lavras Gold Corp |
| Angkor Resources Corp |
Lavras Gold and Angkor Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lavras Gold and Angkor Resources
The main advantage of trading using opposite Lavras Gold and Angkor Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lavras Gold position performs unexpectedly, Angkor Resources 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 Angkor Resources will offset losses from the drop in Angkor Resources' long position.| Lavras Gold vs. TRU Precious Metals | Lavras Gold vs. Orefinders Resources | Lavras Gold vs. North Peak Resources | Lavras Gold vs. Nine Mile Metals |
| Angkor Resources vs. Argo Gold | Angkor Resources vs. Blue Star Gold | Angkor Resources vs. Advance Gold Corp | Angkor Resources vs. Advance United Holdings |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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