Correlation Between Labrador Gold and US Gold
Can any of the company-specific risk be diversified away by investing in both Labrador Gold and US 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 Labrador Gold and US Gold 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 US Gold Corp, you can compare the effects of market volatilities on Labrador Gold and US 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 Labrador Gold with a short position of US Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labrador Gold and US Gold.
Diversification Opportunities for Labrador Gold and US Gold
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Labrador and USAU is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Labrador Gold Corp and US Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Gold Corp 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 US Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Gold Corp has no effect on the direction of Labrador Gold i.e., Labrador Gold and US Gold go up and down completely randomly.
Pair Corralation between Labrador Gold and US Gold
Assuming the 90 days horizon Labrador Gold Corp is expected to under-perform the US Gold. In addition to that, Labrador Gold is 1.94 times more volatile than US Gold Corp. It trades about 0.0 of its total potential returns per unit of risk. US Gold Corp is currently generating about 0.11 per unit of volatility. If you would invest 341.00 in US Gold Corp on August 25, 2024 and sell it today you would earn a total of 460.00 from holding US Gold Corp or generate 134.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labrador Gold Corp vs. US Gold Corp
Performance |
| Timeline |
| Labrador Gold Corp |
| US Gold Corp |
Labrador Gold and US Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labrador Gold and US Gold
The main advantage of trading using opposite Labrador Gold and US Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labrador Gold position performs unexpectedly, US 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 US Gold will offset losses from the drop in US Gold'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 |
| US Gold vs. Labrador Gold Corp | US Gold vs. Aurion Resources | US Gold vs. Puma Exploration | US Gold vs. Golden Star Resource |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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