Correlation Between Loncor Resources and Stakeholder Gold
Can any of the company-specific risk be diversified away by investing in both Loncor Resources and Stakeholder 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 Loncor Resources and Stakeholder Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loncor Resources and Stakeholder Gold Corp, you can compare the effects of market volatilities on Loncor Resources and Stakeholder 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 Loncor Resources with a short position of Stakeholder Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loncor Resources and Stakeholder Gold.
Diversification Opportunities for Loncor Resources and Stakeholder Gold
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loncor and Stakeholder is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Loncor Resources and Stakeholder Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stakeholder Gold Corp and Loncor 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 Loncor Resources are associated (or correlated) with Stakeholder Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stakeholder Gold Corp has no effect on the direction of Loncor Resources i.e., Loncor Resources and Stakeholder Gold go up and down completely randomly.
Pair Corralation between Loncor Resources and Stakeholder Gold
Assuming the 90 days horizon Loncor Resources is expected to under-perform the Stakeholder Gold. But the stock apears to be less risky and, when comparing its historical volatility, Loncor Resources is 2.56 times less risky than Stakeholder Gold. The stock trades about -0.14 of its potential returns per unit of risk. The Stakeholder Gold Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Stakeholder Gold Corp on September 2, 2024 and sell it today you would lose (5.00) from holding Stakeholder Gold Corp or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Loncor Resources vs. Stakeholder Gold Corp
Performance |
| Timeline |
| Loncor Resources |
| Stakeholder Gold Corp |
Loncor Resources and Stakeholder Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loncor Resources and Stakeholder Gold
The main advantage of trading using opposite Loncor Resources and Stakeholder Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loncor Resources position performs unexpectedly, Stakeholder 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 Stakeholder Gold will offset losses from the drop in Stakeholder Gold's long position.| Loncor Resources vs. First Majestic Silver | Loncor Resources vs. Ivanhoe Energy | Loncor Resources vs. Orezone Gold 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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