Correlation Between Puma Exploration and New World
Can any of the company-specific risk be diversified away by investing in both Puma Exploration and New World 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 New World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Exploration and New World Gold, you can compare the effects of market volatilities on Puma Exploration and New World 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 New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Exploration and New World.
Diversification Opportunities for Puma Exploration and New World
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Puma and New is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and New World Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Gold 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 New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Gold has no effect on the direction of Puma Exploration i.e., Puma Exploration and New World go up and down completely randomly.
Pair Corralation between Puma Exploration and New World
Assuming the 90 days horizon Puma Exploration is expected to generate 0.23 times more return on investment than New World. However, Puma Exploration is 4.36 times less risky than New World. It trades about 0.07 of its potential returns per unit of risk. New World Gold is currently generating about -0.21 per unit of risk. If you would invest 5.73 in Puma Exploration on August 25, 2024 and sell it today you would earn a total of 0.27 from holding Puma Exploration or generate 4.71% 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. New World Gold
Performance |
| Timeline |
| Puma Exploration |
| New World Gold |
Puma Exploration and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Exploration and New World
The main advantage of trading using opposite Puma Exploration and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Exploration position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| Puma Exploration vs. Aurion Resources | Puma Exploration vs. Liberty Gold Corp | Puma Exploration vs. Rio2 Limited | Puma Exploration vs. Orezone Gold Corp |
| New World vs. Aurion Resources | New World vs. Liberty Gold Corp | New World vs. Rio2 Limited | New World vs. Orezone 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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