Correlation Between Loncor Gold and Japan Gold
Can any of the company-specific risk be diversified away by investing in both Loncor Gold and Japan 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 Gold and Japan Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loncor Gold and Japan Gold Corp, you can compare the effects of market volatilities on Loncor Gold and Japan 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 Gold with a short position of Japan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loncor Gold and Japan Gold.
Diversification Opportunities for Loncor Gold and Japan Gold
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Loncor and Japan is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Loncor Gold and Japan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Gold Corp and Loncor 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 Loncor Gold are associated (or correlated) with Japan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Gold Corp has no effect on the direction of Loncor Gold i.e., Loncor Gold and Japan Gold go up and down completely randomly.
Pair Corralation between Loncor Gold and Japan Gold
Assuming the 90 days horizon Loncor Gold is expected to generate 0.93 times more return on investment than Japan Gold. However, Loncor Gold is 1.08 times less risky than Japan Gold. It trades about 0.01 of its potential returns per unit of risk. Japan Gold Corp is currently generating about -0.01 per unit of risk. If you would invest 28.00 in Loncor Gold on August 26, 2024 and sell it today you would lose (2.00) from holding Loncor Gold or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 13.96% |
| Values | Daily Returns |
Loncor Gold vs. Japan Gold Corp
Performance |
| Timeline |
| Loncor Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Japan Gold Corp |
Loncor Gold and Japan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loncor Gold and Japan Gold
The main advantage of trading using opposite Loncor Gold and Japan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loncor Gold position performs unexpectedly, Japan 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 Japan Gold will offset losses from the drop in Japan Gold's long position.| Loncor Gold vs. Galiano Gold | Loncor Gold vs. Brunswick Exploration | Loncor Gold vs. B2Gold Corp | Loncor Gold vs. Japan Gold Corp |
| Japan Gold vs. Aurion Resources | Japan Gold vs. Liberty Gold Corp | Japan Gold vs. Rio2 Limited | Japan Gold vs. Orezone Gold 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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