Correlation Between Puma Exploration and DRDGOLD Limited
Can any of the company-specific risk be diversified away by investing in both Puma Exploration and DRDGOLD Limited 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 DRDGOLD Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Exploration and DRDGOLD Limited ADR, you can compare the effects of market volatilities on Puma Exploration and DRDGOLD Limited 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 DRDGOLD Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Exploration and DRDGOLD Limited.
Diversification Opportunities for Puma Exploration and DRDGOLD Limited
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Puma and DRDGOLD is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and DRDGOLD Limited ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRDGOLD Limited ADR 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 DRDGOLD Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRDGOLD Limited ADR has no effect on the direction of Puma Exploration i.e., Puma Exploration and DRDGOLD Limited go up and down completely randomly.
Pair Corralation between Puma Exploration and DRDGOLD Limited
Assuming the 90 days horizon Puma Exploration is expected to generate 1.44 times less return on investment than DRDGOLD Limited. In addition to that, Puma Exploration is 2.62 times more volatile than DRDGOLD Limited ADR. It trades about 0.05 of its total potential returns per unit of risk. DRDGOLD Limited ADR is currently generating about 0.18 per unit of volatility. If you would invest 984.00 in DRDGOLD Limited ADR on November 27, 2024 and sell it today you would earn a total of 123.00 from holding DRDGOLD Limited ADR or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puma Exploration vs. DRDGOLD Limited ADR
Performance |
| Timeline |
| Puma Exploration |
| DRDGOLD Limited ADR |
Puma Exploration and DRDGOLD Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Exploration and DRDGOLD Limited
The main advantage of trading using opposite Puma Exploration and DRDGOLD Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Exploration position performs unexpectedly, DRDGOLD Limited 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 DRDGOLD Limited will offset losses from the drop in DRDGOLD Limited'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 |
| DRDGOLD Limited vs. Osisko Gold Ro | DRDGOLD Limited vs. Eldorado Gold Corp | DRDGOLD Limited vs. SSR Mining | DRDGOLD Limited vs. Idaho Strategic Resources |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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