Correlation Between Gemfields Group and Leocor Gold
Can any of the company-specific risk be diversified away by investing in both Gemfields Group and Leocor Gold 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 Gemfields Group and Leocor Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gemfields Group Limited and Leocor Gold, you can compare the effects of market volatilities on Gemfields Group and Leocor Gold 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 Gemfields Group with a short position of Leocor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemfields Group and Leocor Gold.
Diversification Opportunities for Gemfields Group and Leocor Gold
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gemfields and Leocor is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gemfields Group Limited and Leocor Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leocor Gold and Gemfields Group 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 Gemfields Group Limited are associated (or correlated) with Leocor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leocor Gold has no effect on the direction of Gemfields Group i.e., Gemfields Group and Leocor Gold go up and down completely randomly.
Pair Corralation between Gemfields Group and Leocor Gold
Assuming the 90 days horizon Gemfields Group Limited is expected to under-perform the Leocor Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Gemfields Group Limited is 2.3 times less risky than Leocor Gold. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Leocor Gold is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Leocor Gold on September 2, 2024 and sell it today you would lose (0.24) from holding Leocor Gold or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 44.5% |
| Values | Daily Returns |
Gemfields Group Limited vs. Leocor Gold
Performance |
| Timeline |
| Gemfields Group |
| Leocor Gold |
Gemfields Group and Leocor Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gemfields Group and Leocor Gold
The main advantage of trading using opposite Gemfields Group and Leocor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemfields Group position performs unexpectedly, Leocor Gold 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 Leocor Gold will offset losses from the drop in Leocor Gold's long position.| Gemfields Group vs. Star Royalties | Gemfields Group vs. Defiance Silver Corp | Gemfields Group vs. Diamond Fields Resources | Gemfields Group vs. GoGold Resources |
| Leocor Gold vs. Silver Wolf Exploration | Leocor Gold vs. Monumental Minerals Corp | Leocor Gold vs. Riverside Resources | Leocor Gold vs. Azucar Minerals |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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