Correlation Between Maple Gold and Gold Terra
Can any of the company-specific risk be diversified away by investing in both Maple Gold and Gold Terra 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 Maple Gold and Gold Terra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Gold Mines and Gold Terra Resource, you can compare the effects of market volatilities on Maple Gold and Gold Terra 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 Maple Gold with a short position of Gold Terra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Gold and Gold Terra.
Diversification Opportunities for Maple Gold and Gold Terra
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maple and Gold is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Maple Gold Mines and Gold Terra Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Terra Resource and Maple 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 Maple Gold Mines are associated (or correlated) with Gold Terra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Terra Resource has no effect on the direction of Maple Gold i.e., Maple Gold and Gold Terra go up and down completely randomly.
Pair Corralation between Maple Gold and Gold Terra
Assuming the 90 days horizon Maple Gold Mines is expected to under-perform the Gold Terra. But the stock apears to be less risky and, when comparing its historical volatility, Maple Gold Mines is 1.11 times less risky than Gold Terra. The stock trades about -0.16 of its potential returns per unit of risk. The Gold Terra Resource is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Gold Terra Resource on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Gold Terra Resource or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Gold Mines vs. Gold Terra Resource
Performance |
| Timeline |
| Maple Gold Mines |
| Gold Terra Resource |
Maple Gold and Gold Terra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Gold and Gold Terra
The main advantage of trading using opposite Maple Gold and Gold Terra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Gold position performs unexpectedly, Gold Terra 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 Gold Terra will offset losses from the drop in Gold Terra's long position.| Maple Gold vs. First Majestic Silver | Maple Gold vs. Ivanhoe Energy | Maple Gold vs. Orezone Gold Corp | Maple Gold vs. Faraday Copper Corp |
| Gold Terra vs. First Majestic Silver | Gold Terra vs. Ivanhoe Energy | Gold Terra vs. Orezone Gold Corp | Gold Terra 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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