Correlation Between Outcrop Gold and Sable Resources
Can any of the company-specific risk be diversified away by investing in both Outcrop Gold and Sable Resources 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 Sable Resources 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 Sable Resources, you can compare the effects of market volatilities on Outcrop Gold and Sable Resources 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 Sable Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outcrop Gold and Sable Resources.
Diversification Opportunities for Outcrop Gold and Sable Resources
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Outcrop and Sable is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Outcrop Gold Corp and Sable Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Resources 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 Sable Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Resources has no effect on the direction of Outcrop Gold i.e., Outcrop Gold and Sable Resources go up and down completely randomly.
Pair Corralation between Outcrop Gold and Sable Resources
Assuming the 90 days horizon Outcrop Gold Corp is expected to under-perform the Sable Resources. But the stock apears to be less risky and, when comparing its historical volatility, Outcrop Gold Corp is 1.9 times less risky than Sable Resources. The stock trades about -0.07 of its potential returns per unit of risk. The Sable Resources is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Sable Resources on September 15, 2024 and sell it today you would lose (0.50) from holding Sable Resources or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Outcrop Gold Corp vs. Sable Resources
Performance |
| Timeline |
| Outcrop Gold Corp |
| Sable Resources |
Outcrop Gold and Sable Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outcrop Gold and Sable Resources
The main advantage of trading using opposite Outcrop Gold and Sable Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outcrop Gold position performs unexpectedly, Sable Resources 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 Sable Resources will offset losses from the drop in Sable Resources' long position.| Outcrop Gold vs. Strikepoint Gold | Outcrop Gold vs. Kootenay Silver | Outcrop Gold vs. Kore Mining | Outcrop Gold vs. Blackrock Silver Corp |
| Sable Resources vs. Outcrop Gold Corp | Sable Resources vs. Strikepoint Gold | Sable Resources vs. Defiance Silver Corp | Sable Resources vs. Eskay Mining 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |