Correlation Between Prosper Gold and Ximen Mining
Can any of the company-specific risk be diversified away by investing in both Prosper Gold and Ximen 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 Ximen 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 Ximen Mining Corp, you can compare the effects of market volatilities on Prosper Gold and Ximen 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 Ximen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosper Gold and Ximen Mining.
Diversification Opportunities for Prosper Gold and Ximen Mining
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prosper and Ximen is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Prosper Gold Corp and Ximen Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ximen Mining Corp 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 Ximen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ximen Mining Corp has no effect on the direction of Prosper Gold i.e., Prosper Gold and Ximen Mining go up and down completely randomly.
Pair Corralation between Prosper Gold and Ximen Mining
Assuming the 90 days horizon Prosper Gold is expected to generate 18.38 times less return on investment than Ximen Mining. But when comparing it to its historical volatility, Prosper Gold Corp is 2.25 times less risky than Ximen Mining. It trades about 0.02 of its potential returns per unit of risk. Ximen Mining Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 7.50 in Ximen Mining Corp on November 7, 2024 and sell it today you would earn a total of 2.50 from holding Ximen Mining Corp or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosper Gold Corp vs. Ximen Mining Corp
Performance |
| Timeline |
| Prosper Gold Corp |
| Ximen Mining Corp |
Prosper Gold and Ximen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosper Gold and Ximen Mining
The main advantage of trading using opposite Prosper Gold and Ximen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosper Gold position performs unexpectedly, Ximen 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 Ximen Mining will offset losses from the drop in Ximen 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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