Correlation Between Maple Gold and DRDGOLD Limited
Can any of the company-specific risk be diversified away by investing in both Maple Gold and DRDGOLD Limited 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 DRDGOLD Limited 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 DRDGOLD Limited ADR, you can compare the effects of market volatilities on Maple Gold and DRDGOLD Limited 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 DRDGOLD Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Gold and DRDGOLD Limited.
Diversification Opportunities for Maple Gold and DRDGOLD Limited
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Maple and DRDGOLD is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Maple Gold Mines and DRDGOLD Limited ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRDGOLD Limited ADR 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 DRDGOLD Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRDGOLD Limited ADR has no effect on the direction of Maple Gold i.e., Maple Gold and DRDGOLD Limited go up and down completely randomly.
Pair Corralation between Maple Gold and DRDGOLD Limited
Assuming the 90 days horizon Maple Gold Mines is expected to under-perform the DRDGOLD Limited. In addition to that, Maple Gold is 2.1 times more volatile than DRDGOLD Limited ADR. It trades about 0.0 of its total potential returns per unit of risk. DRDGOLD Limited ADR is currently generating about 0.04 per unit of volatility. If you would invest 684.00 in DRDGOLD Limited ADR on November 2, 2024 and sell it today you would earn a total of 351.00 from holding DRDGOLD Limited ADR or generate 51.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Gold Mines vs. DRDGOLD Limited ADR
Performance |
| Timeline |
| Maple Gold Mines |
| DRDGOLD Limited ADR |
Maple Gold and DRDGOLD Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Gold and DRDGOLD Limited
The main advantage of trading using opposite Maple Gold and DRDGOLD Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Gold position performs unexpectedly, DRDGOLD Limited 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 DRDGOLD Limited will offset losses from the drop in DRDGOLD Limited's long position.| Maple Gold vs. Steppe Gold | Maple Gold vs. Caledonia Mining | Maple Gold vs. Fortuna Silver Mines | Maple Gold vs. Sandstorm Gold Ltd |
| DRDGOLD Limited vs. Osisko Gold Ro | DRDGOLD Limited vs. Eldorado Gold Corp | DRDGOLD Limited vs. SSR Mining | DRDGOLD Limited vs. Idaho Strategic 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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