Correlation Between Red Pine and Klondike Gold
Can any of the company-specific risk be diversified away by investing in both Red Pine and Klondike 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 Red Pine and Klondike Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Pine Exploration and Klondike Gold Corp, you can compare the effects of market volatilities on Red Pine and Klondike 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 Red Pine with a short position of Klondike Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Pine and Klondike Gold.
Diversification Opportunities for Red Pine and Klondike Gold
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Red and Klondike is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Red Pine Exploration and Klondike Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Gold Corp and Red Pine 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 Red Pine Exploration are associated (or correlated) with Klondike Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Gold Corp has no effect on the direction of Red Pine i.e., Red Pine and Klondike Gold go up and down completely randomly.
Pair Corralation between Red Pine and Klondike Gold
Assuming the 90 days horizon Red Pine Exploration is expected to generate 0.64 times more return on investment than Klondike Gold. However, Red Pine Exploration is 1.56 times less risky than Klondike Gold. It trades about 0.07 of its potential returns per unit of risk. Klondike Gold Corp is currently generating about 0.03 per unit of risk. If you would invest 6.05 in Red Pine Exploration on October 26, 2024 and sell it today you would earn a total of 1.95 from holding Red Pine Exploration or generate 32.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Red Pine Exploration vs. Klondike Gold Corp
Performance |
| Timeline |
| Red Pine Exploration |
| Klondike Gold Corp |
Red Pine and Klondike Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Pine and Klondike Gold
The main advantage of trading using opposite Red Pine and Klondike Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Pine position performs unexpectedly, Klondike 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 Klondike Gold will offset losses from the drop in Klondike Gold's long position.| Red Pine vs. Endurance Gold | Red Pine vs. Altamira Gold Corp | Red Pine vs. Grande Portage Resources | Red Pine vs. Tectonic Metals |
| Klondike Gold vs. Puma Exploration | Klondike Gold vs. Sixty North Gold | Klondike Gold vs. Red Pine Exploration | Klondike Gold vs. Grande Portage 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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