Correlation Between Prospector Metals and Asante Gold
Can any of the company-specific risk be diversified away by investing in both Prospector Metals and Asante 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 Prospector Metals and Asante Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prospector Metals Corp and Asante Gold, you can compare the effects of market volatilities on Prospector Metals and Asante 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 Prospector Metals with a short position of Asante Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prospector Metals and Asante Gold.
Diversification Opportunities for Prospector Metals and Asante Gold
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prospector and Asante is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Prospector Metals Corp and Asante Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asante Gold and Prospector Metals 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 Prospector Metals Corp are associated (or correlated) with Asante Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asante Gold has no effect on the direction of Prospector Metals i.e., Prospector Metals and Asante Gold go up and down completely randomly.
Pair Corralation between Prospector Metals and Asante Gold
Assuming the 90 days horizon Prospector Metals Corp is expected to generate 3.17 times more return on investment than Asante Gold. However, Prospector Metals is 3.17 times more volatile than Asante Gold. It trades about 0.03 of its potential returns per unit of risk. Asante Gold is currently generating about 0.01 per unit of risk. If you would invest 13.00 in Prospector Metals Corp on September 14, 2024 and sell it today you would lose (5.00) from holding Prospector Metals Corp or give up 38.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Prospector Metals Corp vs. Asante Gold
Performance |
| Timeline |
| Prospector Metals Corp |
| Asante Gold |
Prospector Metals and Asante Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prospector Metals and Asante Gold
The main advantage of trading using opposite Prospector Metals and Asante Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prospector Metals position performs unexpectedly, Asante 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 Asante Gold will offset losses from the drop in Asante Gold's long position.| Prospector Metals vs. Origin Materials | Prospector Metals vs. Axalta Coating Systems | Prospector Metals vs. Park Electrochemical | Prospector Metals vs. Sable Offshore Corp |
| Asante Gold vs. Advantage Solutions | Asante Gold vs. Atlas Corp | Asante Gold vs. PureCycle Technologies | Asante Gold vs. WM Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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