Correlation Between Major Drilling and Strikepoint Gold
Can any of the company-specific risk be diversified away by investing in both Major Drilling and Strikepoint 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 Strikepoint 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 Strikepoint Gold, you can compare the effects of market volatilities on Major Drilling and Strikepoint 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 Strikepoint Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Drilling and Strikepoint Gold.
Diversification Opportunities for Major Drilling and Strikepoint Gold
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Major and Strikepoint is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Major Drilling Group and Strikepoint Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strikepoint Gold 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 Strikepoint Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strikepoint Gold has no effect on the direction of Major Drilling i.e., Major Drilling and Strikepoint Gold go up and down completely randomly.
Pair Corralation between Major Drilling and Strikepoint Gold
Assuming the 90 days trading horizon Major Drilling Group is expected to generate 0.28 times more return on investment than Strikepoint Gold. However, Major Drilling Group is 3.58 times less risky than Strikepoint Gold. It trades about 0.17 of its potential returns per unit of risk. Strikepoint Gold is currently generating about -0.03 per unit of risk. If you would invest 826.00 in Major Drilling Group on October 20, 2024 and sell it today you would earn a total of 42.00 from holding Major Drilling Group or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Major Drilling Group vs. Strikepoint Gold
Performance |
| Timeline |
| Major Drilling Group |
| Strikepoint Gold |
Major Drilling and Strikepoint Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Major Drilling and Strikepoint Gold
The main advantage of trading using opposite Major Drilling and Strikepoint Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Drilling position performs unexpectedly, Strikepoint 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 Strikepoint Gold will offset losses from the drop in Strikepoint 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 |
| Strikepoint Gold vs. Monarca Minerals | Strikepoint Gold vs. Outcrop Gold Corp | Strikepoint Gold vs. Grande Portage Resources | Strikepoint Gold vs. Klondike Silver 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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