Correlation Between Plato Gold and Kiplin Metals
Can any of the company-specific risk be diversified away by investing in both Plato Gold and Kiplin Metals 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 Kiplin Metals 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 Kiplin Metals, you can compare the effects of market volatilities on Plato Gold and Kiplin Metals 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 Kiplin Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plato Gold and Kiplin Metals.
Diversification Opportunities for Plato Gold and Kiplin Metals
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Plato and Kiplin is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Plato Gold Corp and Kiplin Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiplin Metals 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 Kiplin Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiplin Metals has no effect on the direction of Plato Gold i.e., Plato Gold and Kiplin Metals go up and down completely randomly.
Pair Corralation between Plato Gold and Kiplin Metals
Assuming the 90 days horizon Plato Gold Corp is expected to generate 4.07 times more return on investment than Kiplin Metals. However, Plato Gold is 4.07 times more volatile than Kiplin Metals. It trades about 0.02 of its potential returns per unit of risk. Kiplin Metals is currently generating about -0.23 per unit of risk. If you would invest 2.00 in Plato Gold Corp on August 29, 2024 and sell it today you would lose (0.50) from holding Plato Gold Corp or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plato Gold Corp vs. Kiplin Metals
Performance |
| Timeline |
| Plato Gold Corp |
| Kiplin Metals |
Plato Gold and Kiplin Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plato Gold and Kiplin Metals
The main advantage of trading using opposite Plato Gold and Kiplin Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plato Gold position performs unexpectedly, Kiplin Metals 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 Kiplin Metals will offset losses from the drop in Kiplin Metals' long position.| Plato Gold vs. Q Gold Resources | Plato Gold vs. MAS Gold Corp | Plato Gold vs. ExGen Resources | Plato Gold vs. Carlin Gold |
| Kiplin Metals vs. Arbor Metals Corp | Kiplin Metals vs. Trench Metals Corp | Kiplin Metals vs. Marvel Discovery Corp | Kiplin Metals vs. Fission 30 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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