Correlation Between St James and Osceola Gold
Can any of the company-specific risk be diversified away by investing in both St James and Osceola 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 St James and Osceola Gold 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 Osceola Gold, you can compare the effects of market volatilities on St James and Osceola 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 St James with a short position of Osceola Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of St James and Osceola Gold.
Diversification Opportunities for St James and Osceola Gold
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LRDJF and Osceola is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding St James Gold and Osceola Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osceola 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 Osceola Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osceola Gold has no effect on the direction of St James i.e., St James and Osceola Gold go up and down completely randomly.
Pair Corralation between St James and Osceola Gold
Assuming the 90 days horizon St James is expected to generate 4.64 times less return on investment than Osceola Gold. But when comparing it to its historical volatility, St James Gold is 1.46 times less risky than Osceola Gold. It trades about 0.03 of its potential returns per unit of risk. Osceola Gold is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4.30 in Osceola Gold on October 24, 2024 and sell it today you would lose (0.20) from holding Osceola Gold or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.72% |
| Values | Daily Returns |
St James Gold vs. Osceola Gold
Performance |
| Timeline |
| St James Gold |
| Osceola Gold |
St James and Osceola Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St James and Osceola Gold
The main advantage of trading using opposite St James and Osceola Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St James position performs unexpectedly, Osceola 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 Osceola Gold will offset losses from the drop in Osceola Gold's long position.| St James vs. Puma Exploration | St James vs. Sixty North Gold | St James vs. Red Pine Exploration | St James vs. Grande Portage Resources |
| Osceola Gold vs. Endurance Gold | Osceola Gold vs. Sixty North Gold | Osceola Gold vs. St James Gold | Osceola Gold vs. Grande Portage Resources |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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