Correlation Between Provenance Gold and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both Provenance Gold and Eastern Platinum 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 Eastern Platinum 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 Eastern Platinum Limited, you can compare the effects of market volatilities on Provenance Gold and Eastern Platinum 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 Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provenance Gold and Eastern Platinum.
Diversification Opportunities for Provenance Gold and Eastern Platinum
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Provenance and Eastern is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Provenance Gold Corp and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum 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 Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of Provenance Gold i.e., Provenance Gold and Eastern Platinum go up and down completely randomly.
Pair Corralation between Provenance Gold and Eastern Platinum
Assuming the 90 days horizon Provenance Gold Corp is expected to generate 1.41 times more return on investment than Eastern Platinum. However, Provenance Gold is 1.41 times more volatile than Eastern Platinum Limited. It trades about 0.18 of its potential returns per unit of risk. Eastern Platinum Limited is currently generating about 0.0 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 | 99.2% |
| Values | Daily Returns |
Provenance Gold Corp vs. Eastern Platinum Limited
Performance |
| Timeline |
| Provenance Gold Corp |
| Eastern Platinum |
Provenance Gold and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provenance Gold and Eastern Platinum
The main advantage of trading using opposite Provenance Gold and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provenance Gold position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum'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 |
| Eastern Platinum vs. Thunder Mountain Gold | Eastern Platinum vs. Chesapeake Gold Corp | Eastern Platinum vs. AbraSilver Resource Corp | Eastern Platinum vs. GoGold 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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