Correlation Between Outcrop Gold and Magna Mining
Can any of the company-specific risk be diversified away by investing in both Outcrop Gold and Magna Mining 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 Outcrop Gold and Magna Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outcrop Gold Corp and Magna Mining, you can compare the effects of market volatilities on Outcrop Gold and Magna Mining 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 Outcrop Gold with a short position of Magna Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outcrop Gold and Magna Mining.
Diversification Opportunities for Outcrop Gold and Magna Mining
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Outcrop and Magna is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Outcrop Gold Corp and Magna Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna Mining and Outcrop 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 Outcrop Gold Corp are associated (or correlated) with Magna Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna Mining has no effect on the direction of Outcrop Gold i.e., Outcrop Gold and Magna Mining go up and down completely randomly.
Pair Corralation between Outcrop Gold and Magna Mining
Assuming the 90 days horizon Outcrop Gold Corp is expected to under-perform the Magna Mining. In addition to that, Outcrop Gold is 1.36 times more volatile than Magna Mining. It trades about -0.08 of its total potential returns per unit of risk. Magna Mining is currently generating about 0.01 per unit of volatility. If you would invest 146.00 in Magna Mining on September 25, 2024 and sell it today you would lose (1.00) from holding Magna Mining or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Outcrop Gold Corp vs. Magna Mining
Performance |
| Timeline |
| Outcrop Gold Corp |
| Magna Mining |
Outcrop Gold and Magna Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outcrop Gold and Magna Mining
The main advantage of trading using opposite Outcrop Gold and Magna Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outcrop Gold position performs unexpectedly, Magna Mining 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 Magna Mining will offset losses from the drop in Magna Mining's long position.| Outcrop Gold vs. Strikepoint Gold | Outcrop Gold vs. Kootenay Silver | Outcrop Gold vs. Kore Mining | Outcrop Gold vs. Blackrock Silver Corp |
| Magna Mining vs. Monarca Minerals | Magna Mining vs. Outcrop Gold Corp | Magna Mining vs. Grande Portage Resources | Magna Mining vs. Klondike Silver Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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