Correlation Between Nasdaq and Klondike Gold
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Klondike Gold 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 Nasdaq and Klondike Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Klondike Gold Corp, you can compare the effects of market volatilities on Nasdaq and Klondike Gold 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 Nasdaq with a short position of Klondike Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Klondike Gold.
Diversification Opportunities for Nasdaq and Klondike Gold
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nasdaq and Klondike is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Klondike Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Gold Corp and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Klondike Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Gold Corp has no effect on the direction of Nasdaq i.e., Nasdaq and Klondike Gold go up and down completely randomly.
Pair Corralation between Nasdaq and Klondike Gold
Given the investment horizon of 90 days Nasdaq is expected to generate 1.49 times less return on investment than Klondike Gold. But when comparing it to its historical volatility, Nasdaq Inc is 6.53 times less risky than Klondike Gold. It trades about 0.12 of its potential returns per unit of risk. Klondike Gold Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Klondike Gold Corp on September 2, 2024 and sell it today you would lose (2.00) from holding Klondike Gold Corp or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq Inc vs. Klondike Gold Corp
Performance |
| Timeline |
| Nasdaq Inc |
| Klondike Gold Corp |
Nasdaq and Klondike Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Klondike Gold
The main advantage of trading using opposite Nasdaq and Klondike Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Klondike Gold 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 Klondike Gold will offset losses from the drop in Klondike Gold's long position.The idea behind Nasdaq Inc and Klondike Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Klondike Gold vs. Puma Exploration | Klondike Gold vs. Sixty North Gold | Klondike Gold vs. Red Pine Exploration | Klondike Gold vs. Grande Portage 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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