Correlation Between St James and Roscan Gold
Can any of the company-specific risk be diversified away by investing in both St James and Roscan 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 Roscan 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 Roscan Gold Corp, you can compare the effects of market volatilities on St James and Roscan 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 Roscan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of St James and Roscan Gold.
Diversification Opportunities for St James and Roscan Gold
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LRDJF and Roscan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding St James Gold and Roscan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roscan Gold Corp 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 Roscan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roscan Gold Corp has no effect on the direction of St James i.e., St James and Roscan Gold go up and down completely randomly.
Pair Corralation between St James and Roscan Gold
Assuming the 90 days horizon St James Gold is expected to generate 1.91 times more return on investment than Roscan Gold. However, St James is 1.91 times more volatile than Roscan Gold Corp. It trades about 0.03 of its potential returns per unit of risk. Roscan Gold Corp is currently generating about -0.18 per unit of risk. If you would invest 7.44 in St James Gold on September 12, 2024 and sell it today you would lose (0.24) from holding St James Gold or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
St James Gold vs. Roscan Gold Corp
Performance |
| Timeline |
| St James Gold |
| Roscan Gold Corp |
St James and Roscan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St James and Roscan Gold
The main advantage of trading using opposite St James and Roscan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St James position performs unexpectedly, Roscan 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 Roscan Gold will offset losses from the drop in Roscan 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 |
| Roscan Gold vs. Aurion Resources | Roscan Gold vs. Minera Alamos | Roscan Gold vs. Rio2 Limited | Roscan Gold vs. Kalo Gold Holdings |
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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