Correlation Between Mayfair Gold and Deluxe
Can any of the company-specific risk be diversified away by investing in both Mayfair Gold and Deluxe 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 Deluxe 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 Deluxe, you can compare the effects of market volatilities on Mayfair Gold and Deluxe 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 Deluxe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayfair Gold and Deluxe.
Diversification Opportunities for Mayfair Gold and Deluxe
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mayfair and Deluxe is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp and Deluxe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deluxe 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 Deluxe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deluxe has no effect on the direction of Mayfair Gold i.e., Mayfair Gold and Deluxe go up and down completely randomly.
Pair Corralation between Mayfair Gold and Deluxe
Assuming the 90 days horizon Mayfair Gold is expected to generate 1.59 times less return on investment than Deluxe. In addition to that, Mayfair Gold is 1.13 times more volatile than Deluxe. It trades about 0.03 of its total potential returns per unit of risk. Deluxe is currently generating about 0.05 per unit of volatility. If you would invest 1,492 in Deluxe on September 12, 2024 and sell it today you would earn a total of 866.00 from holding Deluxe or generate 58.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mayfair Gold Corp vs. Deluxe
Performance |
| Timeline |
| Mayfair Gold Corp |
| Deluxe |
Mayfair Gold and Deluxe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayfair Gold and Deluxe
The main advantage of trading using opposite Mayfair Gold and Deluxe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfair Gold position performs unexpectedly, Deluxe 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 Deluxe will offset losses from the drop in Deluxe's long position.| Mayfair Gold vs. Agnico Eagle Mines | Mayfair Gold vs. B2Gold Corp | Mayfair Gold vs. Pan American Silver | Mayfair Gold vs. Gold Fields Ltd |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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