Correlation Between Lavras Gold and Treasury Metals
Can any of the company-specific risk be diversified away by investing in both Lavras Gold and Treasury Metals 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 Treasury Metals 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 Treasury Metals, you can compare the effects of market volatilities on Lavras Gold and Treasury Metals 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 Treasury Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lavras Gold and Treasury Metals.
Diversification Opportunities for Lavras Gold and Treasury Metals
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lavras and Treasury is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lavras Gold Corp and Treasury Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Metals 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 Treasury Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Metals has no effect on the direction of Lavras Gold i.e., Lavras Gold and Treasury Metals go up and down completely randomly.
Pair Corralation between Lavras Gold and Treasury Metals
Assuming the 90 days horizon Lavras Gold Corp is expected to generate 1.72 times more return on investment than Treasury Metals. However, Lavras Gold is 1.72 times more volatile than Treasury Metals. It trades about 0.08 of its potential returns per unit of risk. Treasury Metals is currently generating about 0.01 per unit of risk. If you would invest 32.00 in Lavras Gold Corp on September 1, 2024 and sell it today you would earn a total of 134.00 from holding Lavras Gold Corp or generate 418.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.8% |
| Values | Daily Returns |
Lavras Gold Corp vs. Treasury Metals
Performance |
| Timeline |
| Lavras Gold Corp |
| Treasury Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lavras Gold and Treasury Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lavras Gold and Treasury Metals
The main advantage of trading using opposite Lavras Gold and Treasury Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lavras Gold position performs unexpectedly, Treasury Metals 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 Treasury Metals will offset losses from the drop in Treasury Metals' long position.| Lavras Gold vs. Aurion Resources | Lavras Gold vs. Rio2 Limited | Lavras Gold vs. Palamina Corp | Lavras Gold vs. BTU Metals Corp |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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