Correlation Between Loncor Gold and Karora Resources
Can any of the company-specific risk be diversified away by investing in both Loncor Gold and Karora 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 Loncor Gold and Karora Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loncor Gold and Karora Resources, you can compare the effects of market volatilities on Loncor Gold and Karora 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 Loncor Gold with a short position of Karora Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loncor Gold and Karora Resources.
Diversification Opportunities for Loncor Gold and Karora Resources
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Loncor and Karora is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Loncor Gold and Karora Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karora Resources 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 Karora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karora Resources has no effect on the direction of Loncor Gold i.e., Loncor Gold and Karora Resources go up and down completely randomly.
Pair Corralation between Loncor Gold and Karora Resources
If you would invest 266.00 in Karora Resources on August 29, 2024 and sell it today you would earn a total of 217.00 from holding Karora Resources or generate 81.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.48% |
| Values | Daily Returns |
Loncor Gold vs. Karora Resources
Performance |
| Timeline |
| Loncor Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Karora Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Loncor Gold and Karora Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loncor Gold and Karora Resources
The main advantage of trading using opposite Loncor Gold and Karora Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loncor Gold position performs unexpectedly, Karora 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 Karora Resources will offset losses from the drop in Karora Resources' long position.| Loncor Gold vs. Galiano Gold | Loncor Gold vs. Brunswick Exploration | Loncor Gold vs. B2Gold Corp | Loncor Gold vs. Japan Gold Corp |
| Karora Resources vs. K92 Mining | Karora Resources vs. I 80 Gold Corp | Karora Resources vs. Wesdome Gold Mines | Karora Resources vs. GGX 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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