Correlation Between Mexican Gold and SCOR PK
Can any of the company-specific risk be diversified away by investing in both Mexican Gold and SCOR PK 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 Mexican Gold and SCOR PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mexican Gold Mining and SCOR PK, you can compare the effects of market volatilities on Mexican Gold and SCOR PK 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 Mexican Gold with a short position of SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mexican Gold and SCOR PK.
Diversification Opportunities for Mexican Gold and SCOR PK
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mexican and SCOR is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mexican Gold Mining and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK and Mexican 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 Mexican Gold Mining are associated (or correlated) with SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of Mexican Gold i.e., Mexican Gold and SCOR PK go up and down completely randomly.
Pair Corralation between Mexican Gold and SCOR PK
Assuming the 90 days horizon Mexican Gold Mining is expected to under-perform the SCOR PK. In addition to that, Mexican Gold is 3.41 times more volatile than SCOR PK. It trades about -0.32 of its total potential returns per unit of risk. SCOR PK is currently generating about 0.27 per unit of volatility. If you would invest 214.00 in SCOR PK on September 3, 2024 and sell it today you would earn a total of 34.00 from holding SCOR PK or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mexican Gold Mining vs. SCOR PK
Performance |
| Timeline |
| Mexican Gold Mining |
| SCOR PK |
Mexican Gold and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mexican Gold and SCOR PK
The main advantage of trading using opposite Mexican Gold and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mexican Gold position performs unexpectedly, SCOR PK 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 SCOR PK will offset losses from the drop in SCOR PK's long position.| Mexican Gold vs. Mantaro Silver Corp | Mexican Gold vs. Monumental Minerals Corp | Mexican Gold vs. Leocor Gold | Mexican Gold vs. Riverside 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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