Correlation Between Palamina Corp and Montage Gold
Can any of the company-specific risk be diversified away by investing in both Palamina Corp and Montage 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 Palamina Corp and Montage Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palamina Corp and Montage Gold Corp, you can compare the effects of market volatilities on Palamina Corp and Montage 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 Palamina Corp with a short position of Montage Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palamina Corp and Montage Gold.
Diversification Opportunities for Palamina Corp and Montage Gold
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Palamina and Montage is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Palamina Corp and Montage Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montage Gold Corp and Palamina Corp 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 Palamina Corp are associated (or correlated) with Montage Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montage Gold Corp has no effect on the direction of Palamina Corp i.e., Palamina Corp and Montage Gold go up and down completely randomly.
Pair Corralation between Palamina Corp and Montage Gold
Assuming the 90 days horizon Palamina Corp is expected to generate 2.29 times more return on investment than Montage Gold. However, Palamina Corp is 2.29 times more volatile than Montage Gold Corp. It trades about 0.05 of its potential returns per unit of risk. Montage Gold Corp is currently generating about 0.08 per unit of risk. If you would invest 6.10 in Palamina Corp on September 3, 2024 and sell it today you would earn a total of 3.17 from holding Palamina Corp or generate 51.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palamina Corp vs. Montage Gold Corp
Performance |
| Timeline |
| Palamina Corp |
| Montage Gold Corp |
Palamina Corp and Montage Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palamina Corp and Montage Gold
The main advantage of trading using opposite Palamina Corp and Montage Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palamina Corp position performs unexpectedly, Montage 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 Montage Gold will offset losses from the drop in Montage Gold's long position.| Palamina Corp vs. Gold Springs Resource | Palamina Corp vs. BTU Metals Corp | Palamina Corp vs. Norsemont Mining | Palamina Corp vs. FireFox Gold Corp |
| Montage Gold vs. Leviathan Gold | Montage Gold vs. KORE Mining | Montage Gold vs. Cabral Gold | Montage Gold vs. Independence Gold Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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