Correlation Between St James and New Guinea
Can any of the company-specific risk be diversified away by investing in both St James and New Guinea 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 St James and New Guinea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St James Gold and New Guinea Gold, you can compare the effects of market volatilities on St James and New Guinea 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 St James with a short position of New Guinea. Check out your portfolio center. Please also check ongoing floating volatility patterns of St James and New Guinea.
Diversification Opportunities for St James and New Guinea
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LRDJF and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding St James Gold and New Guinea Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Guinea Gold and St James 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 St James Gold are associated (or correlated) with New Guinea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Guinea Gold has no effect on the direction of St James i.e., St James and New Guinea go up and down completely randomly.
Pair Corralation between St James and New Guinea
Assuming the 90 days horizon St James Gold is expected to generate 2.73 times more return on investment than New Guinea. However, St James is 2.73 times more volatile than New Guinea Gold. It trades about 0.04 of its potential returns per unit of risk. New Guinea Gold is currently generating about -0.04 per unit of risk. If you would invest 7.80 in St James Gold on September 4, 2024 and sell it today you would lose (0.30) from holding St James Gold or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
St James Gold vs. New Guinea Gold
Performance |
| Timeline |
| St James Gold |
| New Guinea Gold |
St James and New Guinea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St James and New Guinea
The main advantage of trading using opposite St James and New Guinea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St James position performs unexpectedly, New Guinea 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 New Guinea will offset losses from the drop in New Guinea's long position.The idea behind St James Gold and New Guinea Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| New Guinea vs. Endurance Gold | New Guinea vs. Sixty North Gold | New Guinea vs. St James Gold | New Guinea vs. Makara Mining 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |