Correlation Between Prosper Gold and First Mining
Can any of the company-specific risk be diversified away by investing in both Prosper Gold and First 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 Prosper Gold and First Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosper Gold Corp and First Mining Gold, you can compare the effects of market volatilities on Prosper Gold and First 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 Prosper Gold with a short position of First Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosper Gold and First Mining.
Diversification Opportunities for Prosper Gold and First Mining
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosper and First is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Prosper Gold Corp and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold and Prosper 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 Prosper Gold Corp are associated (or correlated) with First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of Prosper Gold i.e., Prosper Gold and First Mining go up and down completely randomly.
Pair Corralation between Prosper Gold and First Mining
Assuming the 90 days horizon Prosper Gold is expected to generate 16.16 times less return on investment than First Mining. But when comparing it to its historical volatility, Prosper Gold Corp is 2.57 times less risky than First Mining. It trades about 0.02 of its potential returns per unit of risk. First Mining Gold is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7.00 in First Mining Gold on November 6, 2024 and sell it today you would earn a total of 7.00 from holding First Mining Gold or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Prosper Gold Corp vs. First Mining Gold
Performance |
| Timeline |
| Prosper Gold Corp |
| First Mining Gold |
Prosper Gold and First Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosper Gold and First Mining
The main advantage of trading using opposite Prosper Gold and First Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosper Gold position performs unexpectedly, First 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 First Mining will offset losses from the drop in First Mining's long position.| Prosper Gold vs. Algoma Steel Group | Prosper Gold vs. Pollard Banknote Limited | Prosper Gold vs. IGM Financial | Prosper Gold vs. High Liner Foods |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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