Correlation Between Prospector Metals and Goldgroup Mining
Can any of the company-specific risk be diversified away by investing in both Prospector Metals and Goldgroup 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 Prospector Metals and Goldgroup Mining 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 Goldgroup Mining, you can compare the effects of market volatilities on Prospector Metals and Goldgroup 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 Prospector Metals with a short position of Goldgroup Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prospector Metals and Goldgroup Mining.
Diversification Opportunities for Prospector Metals and Goldgroup Mining
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Prospector and Goldgroup is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Prospector Metals Corp and Goldgroup Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldgroup Mining 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 Goldgroup Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldgroup Mining has no effect on the direction of Prospector Metals i.e., Prospector Metals and Goldgroup Mining go up and down completely randomly.
Pair Corralation between Prospector Metals and Goldgroup Mining
Assuming the 90 days horizon Prospector Metals is expected to generate 4.7 times less return on investment than Goldgroup Mining. But when comparing it to its historical volatility, Prospector Metals Corp is 1.38 times less risky than Goldgroup Mining. It trades about 0.1 of its potential returns per unit of risk. Goldgroup Mining is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Goldgroup Mining on December 4, 2024 and sell it today you would earn a total of 14.00 from holding Goldgroup Mining or generate 87.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prospector Metals Corp vs. Goldgroup Mining
Performance |
| Timeline |
| Prospector Metals Corp |
| Goldgroup Mining |
Prospector Metals and Goldgroup Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prospector Metals and Goldgroup Mining
The main advantage of trading using opposite Prospector Metals and Goldgroup Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prospector Metals position performs unexpectedly, Goldgroup 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 Goldgroup Mining will offset losses from the drop in Goldgroup Mining's long position.| Prospector Metals vs. AA Mission Acquisition | Prospector Metals vs. MYR Group | Prospector Metals vs. Emerson Electric | Prospector Metals vs. Inflection Point Acquisition |
| Goldgroup Mining vs. Antioquia Gold | Goldgroup Mining vs. Asante Gold | Goldgroup Mining vs. Big Ridge Gold | Goldgroup Mining vs. Angus Gold |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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