Correlation Between Roscan Gold and Solstice Gold
Can any of the company-specific risk be diversified away by investing in both Roscan Gold and Solstice Gold 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 Roscan Gold and Solstice Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roscan Gold Corp and Solstice Gold Corp, you can compare the effects of market volatilities on Roscan Gold and Solstice Gold 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 Roscan Gold with a short position of Solstice Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roscan Gold and Solstice Gold.
Diversification Opportunities for Roscan Gold and Solstice Gold
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Roscan and Solstice is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Roscan Gold Corp and Solstice Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstice Gold Corp and Roscan 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 Roscan Gold Corp are associated (or correlated) with Solstice Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstice Gold Corp has no effect on the direction of Roscan Gold i.e., Roscan Gold and Solstice Gold go up and down completely randomly.
Pair Corralation between Roscan Gold and Solstice Gold
Assuming the 90 days horizon Roscan Gold Corp is expected to under-perform the Solstice Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Roscan Gold Corp is 8.47 times less risky than Solstice Gold. The otc stock trades about -0.02 of its potential returns per unit of risk. The Solstice Gold Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1.75 in Solstice Gold Corp on September 1, 2024 and sell it today you would earn a total of 0.14 from holding Solstice Gold Corp or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Roscan Gold Corp vs. Solstice Gold Corp
Performance |
| Timeline |
| Roscan Gold Corp |
| Solstice Gold Corp |
Roscan Gold and Solstice Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roscan Gold and Solstice Gold
The main advantage of trading using opposite Roscan Gold and Solstice Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roscan Gold position performs unexpectedly, Solstice Gold 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 Solstice Gold will offset losses from the drop in Solstice Gold's long position.| Roscan Gold vs. Aurion Resources | Roscan Gold vs. Minera Alamos | Roscan Gold vs. Rio2 Limited | Roscan Gold vs. Kalo Gold Holdings |
| Solstice Gold vs. Aurion Resources | Solstice Gold vs. Rio2 Limited | Solstice Gold vs. Palamina Corp | Solstice Gold vs. BTU Metals 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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