Correlation Between Provenance Gold and American Copper
Can any of the company-specific risk be diversified away by investing in both Provenance Gold and American Copper 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 Provenance Gold and American Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Provenance Gold Corp and American Copper Development, you can compare the effects of market volatilities on Provenance Gold and American Copper 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 Provenance Gold with a short position of American Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provenance Gold and American Copper.
Diversification Opportunities for Provenance Gold and American Copper
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Provenance and American is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Provenance Gold Corp and American Copper Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Copper Deve and Provenance Gold 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 Provenance Gold Corp are associated (or correlated) with American Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Copper Deve has no effect on the direction of Provenance Gold i.e., Provenance Gold and American Copper go up and down completely randomly.
Pair Corralation between Provenance Gold and American Copper
Assuming the 90 days horizon Provenance Gold Corp is expected to generate 0.45 times more return on investment than American Copper. However, Provenance Gold Corp is 2.2 times less risky than American Copper. It trades about 0.18 of its potential returns per unit of risk. American Copper Development is currently generating about 0.06 per unit of risk. If you would invest 5.00 in Provenance Gold Corp on November 3, 2024 and sell it today you would earn a total of 15.00 from holding Provenance Gold Corp or generate 300.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.43% |
| Values | Daily Returns |
Provenance Gold Corp vs. American Copper Development
Performance |
| Timeline |
| Provenance Gold Corp |
| American Copper Deve |
Provenance Gold and American Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provenance Gold and American Copper
The main advantage of trading using opposite Provenance Gold and American Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provenance Gold position performs unexpectedly, American Copper 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 American Copper will offset losses from the drop in American Copper's long position.| Provenance Gold vs. Chesapeake Gold Corp | Provenance Gold vs. Clifton Mining Co | Provenance Gold vs. Usha Resources | Provenance Gold vs. American Copper Development |
| American Copper vs. Marine Products | American Copper vs. ANTA Sports Products | American Copper vs. SunOpta | American Copper vs. Cardinal Health |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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