Correlation Between Major Drilling and Prosper Gold
Can any of the company-specific risk be diversified away by investing in both Major Drilling and Prosper 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 Major Drilling and Prosper Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Major Drilling Group and Prosper Gold Corp, you can compare the effects of market volatilities on Major Drilling and Prosper 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 Major Drilling with a short position of Prosper Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Drilling and Prosper Gold.
Diversification Opportunities for Major Drilling and Prosper Gold
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Major and Prosper is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Major Drilling Group and Prosper Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosper Gold Corp and Major Drilling 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 Major Drilling Group are associated (or correlated) with Prosper Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosper Gold Corp has no effect on the direction of Major Drilling i.e., Major Drilling and Prosper Gold go up and down completely randomly.
Pair Corralation between Major Drilling and Prosper Gold
Assuming the 90 days trading horizon Major Drilling Group is expected to under-perform the Prosper Gold. But the stock apears to be less risky and, when comparing its historical volatility, Major Drilling Group is 3.14 times less risky than Prosper Gold. The stock trades about 0.0 of its potential returns per unit of risk. The Prosper Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Prosper Gold Corp on September 14, 2024 and sell it today you would lose (10.50) from holding Prosper Gold Corp or give up 52.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Major Drilling Group vs. Prosper Gold Corp
Performance |
| Timeline |
| Major Drilling Group |
| Prosper Gold Corp |
Major Drilling and Prosper Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Major Drilling and Prosper Gold
The main advantage of trading using opposite Major Drilling and Prosper Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Drilling position performs unexpectedly, Prosper 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 Prosper Gold will offset losses from the drop in Prosper Gold's long position.| Major Drilling vs. Pason Systems | Major Drilling vs. HudBay Minerals | Major Drilling vs. Ensign Energy Services | Major Drilling vs. Precision Drilling |
| Prosper Gold vs. Foraco International SA | Prosper Gold vs. Geodrill Limited | Prosper Gold vs. Major Drilling Group | Prosper Gold vs. Bri Chem 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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