Correlation Between Labrador Gold and Puma Exploration
Can any of the company-specific risk be diversified away by investing in both Labrador Gold and Puma Exploration 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 Labrador Gold and Puma Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labrador Gold Corp and Puma Exploration, you can compare the effects of market volatilities on Labrador Gold and Puma Exploration 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 Labrador Gold with a short position of Puma Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labrador Gold and Puma Exploration.
Diversification Opportunities for Labrador Gold and Puma Exploration
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Labrador and Puma is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Labrador Gold Corp and Puma Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Exploration and Labrador 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 Labrador Gold Corp are associated (or correlated) with Puma Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Exploration has no effect on the direction of Labrador Gold i.e., Labrador Gold and Puma Exploration go up and down completely randomly.
Pair Corralation between Labrador Gold and Puma Exploration
Assuming the 90 days horizon Labrador Gold Corp is expected to under-perform the Puma Exploration. In addition to that, Labrador Gold is 1.21 times more volatile than Puma Exploration. It trades about -0.24 of its total potential returns per unit of risk. Puma Exploration is currently generating about 0.02 per unit of volatility. If you would invest 6.00 in Puma Exploration on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Puma Exploration or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labrador Gold Corp vs. Puma Exploration
Performance |
| Timeline |
| Labrador Gold Corp |
| Puma Exploration |
Labrador Gold and Puma Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labrador Gold and Puma Exploration
The main advantage of trading using opposite Labrador Gold and Puma Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labrador Gold position performs unexpectedly, Puma Exploration 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 Puma Exploration will offset losses from the drop in Puma Exploration's long position.| Labrador Gold vs. Exploits Discovery Corp | Labrador Gold vs. Mako Mining Corp | Labrador Gold vs. Puma Exploration | Labrador Gold vs. Aurion Resources |
| Puma Exploration vs. Aurion Resources | Puma Exploration vs. Liberty Gold Corp | Puma Exploration vs. Orezone Gold Corp | Puma Exploration vs. Fortuna Silver Mines |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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