Correlation Between P2 Gold and Western Alaska
Can any of the company-specific risk be diversified away by investing in both P2 Gold and Western Alaska 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 P2 Gold and Western Alaska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between P2 Gold and Western Alaska Minerals, you can compare the effects of market volatilities on P2 Gold and Western Alaska 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 P2 Gold with a short position of Western Alaska. Check out your portfolio center. Please also check ongoing floating volatility patterns of P2 Gold and Western Alaska.
Diversification Opportunities for P2 Gold and Western Alaska
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PGLDF and Western is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding P2 Gold and Western Alaska Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Alaska Minerals and P2 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 P2 Gold are associated (or correlated) with Western Alaska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Alaska Minerals has no effect on the direction of P2 Gold i.e., P2 Gold and Western Alaska go up and down completely randomly.
Pair Corralation between P2 Gold and Western Alaska
Assuming the 90 days horizon P2 Gold is expected to under-perform the Western Alaska. But the otc stock apears to be less risky and, when comparing its historical volatility, P2 Gold is 1.13 times less risky than Western Alaska. The otc stock trades about -0.03 of its potential returns per unit of risk. The Western Alaska Minerals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 61.00 in Western Alaska Minerals on September 1, 2024 and sell it today you would lose (18.00) from holding Western Alaska Minerals or give up 29.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
P2 Gold vs. Western Alaska Minerals
Performance |
| Timeline |
| P2 Gold |
| Western Alaska Minerals |
P2 Gold and Western Alaska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with P2 Gold and Western Alaska
The main advantage of trading using opposite P2 Gold and Western Alaska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if P2 Gold position performs unexpectedly, Western Alaska 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 Western Alaska will offset losses from the drop in Western Alaska's long position.| P2 Gold vs. Max Resource Corp | P2 Gold vs. Western Alaska Minerals | P2 Gold vs. CMC Metals | P2 Gold vs. Summa Silver Corp |
| Western Alaska vs. First Tellurium Corp | Western Alaska vs. Max Resource Corp | Western Alaska vs. P2 Gold | Western Alaska vs. CMC Metals |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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