Correlation Between New Found and Dolly Varden
Can any of the company-specific risk be diversified away by investing in both New Found and Dolly Varden 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 New Found and Dolly Varden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Found Gold and Dolly Varden Silver, you can compare the effects of market volatilities on New Found and Dolly Varden 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 New Found with a short position of Dolly Varden. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Found and Dolly Varden.
Diversification Opportunities for New Found and Dolly Varden
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between New and Dolly is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding New Found Gold and Dolly Varden Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolly Varden Silver and New Found 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 New Found Gold are associated (or correlated) with Dolly Varden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolly Varden Silver has no effect on the direction of New Found i.e., New Found and Dolly Varden go up and down completely randomly.
Pair Corralation between New Found and Dolly Varden
Assuming the 90 days horizon New Found Gold is expected to under-perform the Dolly Varden. In addition to that, New Found is 1.17 times more volatile than Dolly Varden Silver. It trades about -0.15 of its total potential returns per unit of risk. Dolly Varden Silver is currently generating about -0.13 per unit of volatility. If you would invest 130.00 in Dolly Varden Silver on September 1, 2024 and sell it today you would lose (16.00) from holding Dolly Varden Silver or give up 12.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Found Gold vs. Dolly Varden Silver
Performance |
| Timeline |
| New Found Gold |
| Dolly Varden Silver |
New Found and Dolly Varden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Found and Dolly Varden
The main advantage of trading using opposite New Found and Dolly Varden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Found position performs unexpectedly, Dolly Varden 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 Dolly Varden will offset losses from the drop in Dolly Varden's long position.| New Found vs. Oculus VisionTech | New Found vs. CNJ Capital Investments | New Found vs. Quisitive Technology Solutions | New Found vs. Cogeco Communications |
| Dolly Varden vs. Defiance Silver Corp | Dolly Varden vs. Metallic Minerals Corp | Dolly Varden vs. Kootenay Silver | Dolly Varden vs. Minaurum Gold |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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