Correlation Between MAS Gold and CANEX Metals
Can any of the company-specific risk be diversified away by investing in both MAS Gold and CANEX Metals 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 MAS Gold and CANEX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAS Gold Corp and CANEX Metals, you can compare the effects of market volatilities on MAS Gold and CANEX Metals 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 MAS Gold with a short position of CANEX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAS Gold and CANEX Metals.
Diversification Opportunities for MAS Gold and CANEX Metals
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MAS and CANEX is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MAS Gold Corp and CANEX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANEX Metals and MAS 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 MAS Gold Corp are associated (or correlated) with CANEX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANEX Metals has no effect on the direction of MAS Gold i.e., MAS Gold and CANEX Metals go up and down completely randomly.
Pair Corralation between MAS Gold and CANEX Metals
Assuming the 90 days horizon MAS Gold Corp is expected to generate 2.01 times more return on investment than CANEX Metals. However, MAS Gold is 2.01 times more volatile than CANEX Metals. It trades about 0.1 of its potential returns per unit of risk. CANEX Metals is currently generating about 0.05 per unit of risk. If you would invest 1.00 in MAS Gold Corp on September 1, 2024 and sell it today you would earn a total of 0.50 from holding MAS Gold Corp or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAS Gold Corp vs. CANEX Metals
Performance |
| Timeline |
| MAS Gold Corp |
| CANEX Metals |
MAS Gold and CANEX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAS Gold and CANEX Metals
The main advantage of trading using opposite MAS Gold and CANEX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAS Gold position performs unexpectedly, CANEX Metals 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 CANEX Metals will offset losses from the drop in CANEX Metals' long position.| MAS Gold vs. Desert Gold Ventures | MAS Gold vs. Goldbank Mining Corp | MAS Gold vs. Themac Resources Group | MAS Gold vs. Plato Gold Corp |
| CANEX Metals vs. Magna Terra Minerals | CANEX Metals vs. Golden Pursuit Resources | CANEX Metals vs. Wildsky Resources | CANEX Metals vs. Inventus 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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