Correlation Between Lupaka Gold and St Augustine
Can any of the company-specific risk be diversified away by investing in both Lupaka Gold and St Augustine 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 Lupaka Gold and St Augustine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupaka Gold Corp and St Augustine Gold, you can compare the effects of market volatilities on Lupaka Gold and St Augustine 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 Lupaka Gold with a short position of St Augustine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupaka Gold and St Augustine.
Diversification Opportunities for Lupaka Gold and St Augustine
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lupaka and SAU is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lupaka Gold Corp and St Augustine Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Augustine Gold and Lupaka 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 Lupaka Gold Corp are associated (or correlated) with St Augustine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Augustine Gold has no effect on the direction of Lupaka Gold i.e., Lupaka Gold and St Augustine go up and down completely randomly.
Pair Corralation between Lupaka Gold and St Augustine
Assuming the 90 days horizon Lupaka Gold Corp is expected to generate 1.29 times more return on investment than St Augustine. However, Lupaka Gold is 1.29 times more volatile than St Augustine Gold. It trades about 0.03 of its potential returns per unit of risk. St Augustine Gold is currently generating about 0.03 per unit of risk. If you would invest 8.00 in Lupaka Gold Corp on August 29, 2024 and sell it today you would lose (1.00) from holding Lupaka Gold Corp or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lupaka Gold Corp vs. St Augustine Gold
Performance |
| Timeline |
| Lupaka Gold Corp |
| St Augustine Gold |
Lupaka Gold and St Augustine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupaka Gold and St Augustine
The main advantage of trading using opposite Lupaka Gold and St Augustine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupaka Gold position performs unexpectedly, St Augustine 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 St Augustine will offset losses from the drop in St Augustine's long position.| Lupaka Gold vs. First Majestic Silver | Lupaka Gold vs. Ivanhoe Energy | Lupaka Gold vs. Orezone Gold Corp | Lupaka Gold vs. Faraday Copper Corp |
| St Augustine vs. Northcliff Resources | St Augustine vs. Lupaka Gold Corp | St Augustine vs. Angkor Resources Corp | St Augustine vs. Minco Capital 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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