Correlation Between New World and Puma Exploration
Can any of the company-specific risk be diversified away by investing in both New World 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 New World and Puma Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New World Gold and Puma Exploration, you can compare the effects of market volatilities on New World 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 New World with a short position of Puma Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of New World and Puma Exploration.
Diversification Opportunities for New World and Puma Exploration
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Puma is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding New World Gold and Puma Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Exploration and New World 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 World Gold 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 New World i.e., New World and Puma Exploration go up and down completely randomly.
Pair Corralation between New World and Puma Exploration
Given the investment horizon of 90 days New World Gold is expected to generate 13.95 times more return on investment than Puma Exploration. However, New World is 13.95 times more volatile than Puma Exploration. It trades about 0.12 of its potential returns per unit of risk. Puma Exploration is currently generating about 0.01 per unit of risk. If you would invest 0.01 in New World Gold on August 29, 2024 and sell it today you would earn a total of 0.00 from holding New World Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New World Gold vs. Puma Exploration
Performance |
| Timeline |
| New World Gold |
| Puma Exploration |
New World and Puma Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New World and Puma Exploration
The main advantage of trading using opposite New World and Puma Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New World 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.| New World vs. Aurion Resources | New World vs. Liberty Gold Corp | New World vs. Orezone Gold Corp | New World vs. Fortuna Silver Mines |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |