Correlation Between Plato Gold and HudBay Minerals
Can any of the company-specific risk be diversified away by investing in both Plato Gold and HudBay Minerals 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 Plato Gold and HudBay Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plato Gold Corp and HudBay Minerals, you can compare the effects of market volatilities on Plato Gold and HudBay Minerals 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 Plato Gold with a short position of HudBay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plato Gold and HudBay Minerals.
Diversification Opportunities for Plato Gold and HudBay Minerals
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plato and HudBay is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Plato Gold Corp and HudBay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HudBay Minerals and Plato 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 Plato Gold Corp are associated (or correlated) with HudBay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HudBay Minerals has no effect on the direction of Plato Gold i.e., Plato Gold and HudBay Minerals go up and down completely randomly.
Pair Corralation between Plato Gold and HudBay Minerals
Assuming the 90 days horizon Plato Gold Corp is expected to generate 5.81 times more return on investment than HudBay Minerals. However, Plato Gold is 5.81 times more volatile than HudBay Minerals. It trades about 0.07 of its potential returns per unit of risk. HudBay Minerals is currently generating about 0.05 per unit of risk. If you would invest 3.00 in Plato Gold Corp on August 25, 2024 and sell it today you would lose (1.00) from holding Plato Gold Corp or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Plato Gold Corp vs. HudBay Minerals
Performance |
| Timeline |
| Plato Gold Corp |
| HudBay Minerals |
Plato Gold and HudBay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plato Gold and HudBay Minerals
The main advantage of trading using opposite Plato Gold and HudBay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plato Gold position performs unexpectedly, HudBay Minerals 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 HudBay Minerals will offset losses from the drop in HudBay Minerals' long position.| Plato Gold vs. Q Gold Resources | Plato Gold vs. MAS Gold Corp | Plato Gold vs. ExGen Resources | Plato Gold vs. Carlin Gold |
| HudBay Minerals vs. Lundin Mining | HudBay Minerals vs. First Quantum Minerals | HudBay Minerals vs. Ivanhoe Mines | HudBay Minerals vs. Capstone 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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