Correlation Between Patagonia Gold and Big Rock
Can any of the company-specific risk be diversified away by investing in both Patagonia Gold and Big Rock 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 Patagonia Gold and Big Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patagonia Gold Corp and Big Rock Brewery, you can compare the effects of market volatilities on Patagonia Gold and Big Rock 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 Patagonia Gold with a short position of Big Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patagonia Gold and Big Rock.
Diversification Opportunities for Patagonia Gold and Big Rock
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Patagonia and Big is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Patagonia Gold Corp and Big Rock Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Rock Brewery and Patagonia 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 Patagonia Gold Corp are associated (or correlated) with Big Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Rock Brewery has no effect on the direction of Patagonia Gold i.e., Patagonia Gold and Big Rock go up and down completely randomly.
Pair Corralation between Patagonia Gold and Big Rock
Assuming the 90 days trading horizon Patagonia Gold Corp is expected to generate 1.66 times more return on investment than Big Rock. However, Patagonia Gold is 1.66 times more volatile than Big Rock Brewery. It trades about 0.08 of its potential returns per unit of risk. Big Rock Brewery is currently generating about 0.08 per unit of risk. If you would invest 2.00 in Patagonia Gold Corp on September 12, 2024 and sell it today you would earn a total of 1.50 from holding Patagonia Gold Corp or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patagonia Gold Corp vs. Big Rock Brewery
Performance |
| Timeline |
| Patagonia Gold Corp |
| Big Rock Brewery |
Patagonia Gold and Big Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patagonia Gold and Big Rock
The main advantage of trading using opposite Patagonia Gold and Big Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patagonia Gold position performs unexpectedly, Big Rock 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 Big Rock will offset losses from the drop in Big Rock's long position.| Patagonia Gold vs. Ressources Minieres Radisson | Patagonia Gold vs. Galantas Gold Corp | Patagonia Gold vs. Red Pine Exploration | Patagonia Gold vs. Kore Mining |
| Big Rock vs. iShares Canadian HYBrid | Big Rock vs. Solar Alliance Energy | Big Rock vs. PHN Multi Style All Cap | Big Rock vs. EcoSynthetix |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |