Correlation Between Mayfair Gold and Galway Metals
Can any of the company-specific risk be diversified away by investing in both Mayfair Gold and Galway 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 Mayfair Gold and Galway Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayfair Gold Corp and Galway Metals, you can compare the effects of market volatilities on Mayfair Gold and Galway 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 Mayfair Gold with a short position of Galway Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayfair Gold and Galway Metals.
Diversification Opportunities for Mayfair Gold and Galway Metals
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mayfair and Galway is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp and Galway Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galway Metals and Mayfair 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 Mayfair Gold Corp are associated (or correlated) with Galway Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galway Metals has no effect on the direction of Mayfair Gold i.e., Mayfair Gold and Galway Metals go up and down completely randomly.
Pair Corralation between Mayfair Gold and Galway Metals
Assuming the 90 days horizon Mayfair Gold Corp is expected to under-perform the Galway Metals. But the stock apears to be less risky and, when comparing its historical volatility, Mayfair Gold Corp is 2.07 times less risky than Galway Metals. The stock trades about -0.02 of its potential returns per unit of risk. The Galway Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Galway Metals on September 4, 2024 and sell it today you would earn a total of 16.00 from holding Galway Metals or generate 47.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayfair Gold Corp vs. Galway Metals
Performance |
| Timeline |
| Mayfair Gold Corp |
| Galway Metals |
Mayfair Gold and Galway Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayfair Gold and Galway Metals
The main advantage of trading using opposite Mayfair Gold and Galway Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfair Gold position performs unexpectedly, Galway 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 Galway Metals will offset losses from the drop in Galway Metals' long position.| Mayfair Gold vs. First Majestic Silver | Mayfair Gold vs. Ivanhoe Energy | Mayfair Gold vs. Orezone Gold Corp | Mayfair Gold vs. Faraday Copper Corp |
| Galway Metals vs. First Majestic Silver | Galway Metals vs. Ivanhoe Energy | Galway Metals vs. Orezone Gold Corp | Galway Metals vs. Faraday Copper 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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