Correlation Between Puma Exploration and Blue Lagoon
Can any of the company-specific risk be diversified away by investing in both Puma Exploration and Blue Lagoon 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 Puma Exploration and Blue Lagoon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Exploration and Blue Lagoon Resources, you can compare the effects of market volatilities on Puma Exploration and Blue Lagoon 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 Puma Exploration with a short position of Blue Lagoon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Exploration and Blue Lagoon.
Diversification Opportunities for Puma Exploration and Blue Lagoon
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Puma and Blue is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and Blue Lagoon Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Lagoon Resources and Puma Exploration 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 Puma Exploration are associated (or correlated) with Blue Lagoon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Lagoon Resources has no effect on the direction of Puma Exploration i.e., Puma Exploration and Blue Lagoon go up and down completely randomly.
Pair Corralation between Puma Exploration and Blue Lagoon
Assuming the 90 days horizon Puma Exploration is expected to generate 1.02 times more return on investment than Blue Lagoon. However, Puma Exploration is 1.02 times more volatile than Blue Lagoon Resources. It trades about 0.15 of its potential returns per unit of risk. Blue Lagoon Resources is currently generating about -0.07 per unit of risk. If you would invest 5.00 in Puma Exploration on October 23, 2024 and sell it today you would earn a total of 0.97 from holding Puma Exploration or generate 19.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Puma Exploration vs. Blue Lagoon Resources
Performance |
| Timeline |
| Puma Exploration |
| Blue Lagoon Resources |
Puma Exploration and Blue Lagoon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Exploration and Blue Lagoon
The main advantage of trading using opposite Puma Exploration and Blue Lagoon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Exploration position performs unexpectedly, Blue Lagoon 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 Blue Lagoon will offset losses from the drop in Blue Lagoon's long position.| Puma Exploration vs. Sixty North Gold | Puma Exploration vs. Red Pine Exploration | Puma Exploration vs. Grande Portage Resources | Puma Exploration vs. Altamira Gold Corp |
| Blue Lagoon vs. Red Pine Exploration | Blue Lagoon vs. Grande Portage Resources | Blue Lagoon vs. White Gold Corp | Blue Lagoon vs. Sitka 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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