Correlation Between Puma Exploration and Brookmount Explorations
Can any of the company-specific risk be diversified away by investing in both Puma Exploration and Brookmount Explorations 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 Brookmount Explorations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Exploration and Brookmount Explorations, you can compare the effects of market volatilities on Puma Exploration and Brookmount Explorations 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 Brookmount Explorations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Exploration and Brookmount Explorations.
Diversification Opportunities for Puma Exploration and Brookmount Explorations
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Puma and Brookmount is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and Brookmount Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookmount Explorations 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 Brookmount Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookmount Explorations has no effect on the direction of Puma Exploration i.e., Puma Exploration and Brookmount Explorations go up and down completely randomly.
Pair Corralation between Puma Exploration and Brookmount Explorations
Assuming the 90 days horizon Puma Exploration is expected to generate 2.33 times less return on investment than Brookmount Explorations. But when comparing it to its historical volatility, Puma Exploration is 1.07 times less risky than Brookmount Explorations. It trades about 0.05 of its potential returns per unit of risk. Brookmount Explorations is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4.20 in Brookmount Explorations on November 27, 2024 and sell it today you would earn a total of 0.50 from holding Brookmount Explorations or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puma Exploration vs. Brookmount Explorations
Performance |
| Timeline |
| Puma Exploration |
| Brookmount Explorations |
Puma Exploration and Brookmount Explorations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Exploration and Brookmount Explorations
The main advantage of trading using opposite Puma Exploration and Brookmount Explorations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Exploration position performs unexpectedly, Brookmount Explorations 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 Brookmount Explorations will offset losses from the drop in Brookmount Explorations' 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 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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