Correlation Between Plato Gold and Monument Mining
Can any of the company-specific risk be diversified away by investing in both Plato Gold and Monument 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 Plato Gold and Monument Mining 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 Monument Mining Limited, you can compare the effects of market volatilities on Plato Gold and Monument 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 Plato Gold with a short position of Monument Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plato Gold and Monument Mining.
Diversification Opportunities for Plato Gold and Monument Mining
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Plato and Monument is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Plato Gold Corp and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining 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 Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of Plato Gold i.e., Plato Gold and Monument Mining go up and down completely randomly.
Pair Corralation between Plato Gold and Monument Mining
Assuming the 90 days horizon Plato Gold Corp is expected to under-perform the Monument Mining. In addition to that, Plato Gold is 3.48 times more volatile than Monument Mining Limited. It trades about -0.04 of its total potential returns per unit of risk. Monument Mining Limited is currently generating about 0.13 per unit of volatility. If you would invest 23.00 in Monument Mining Limited on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Monument Mining Limited or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Plato Gold Corp vs. Monument Mining Limited
Performance |
| Timeline |
| Plato Gold Corp |
| Monument Mining |
Plato Gold and Monument Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plato Gold and Monument Mining
The main advantage of trading using opposite Plato Gold and Monument Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plato Gold position performs unexpectedly, Monument 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 Monument Mining will offset losses from the drop in Monument Mining's long position.| Plato Gold vs. Q Gold Resources | Plato Gold vs. MAS Gold Corp | Plato Gold vs. ExGen Resources | Plato Gold vs. Carlin Gold |
| Monument Mining vs. Majestic Gold Corp | Monument Mining vs. Gunpoint Exploration | Monument Mining vs. Q Gold Resources | Monument Mining vs. MAS Gold 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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