Correlation Between Red Pine and Lavras Gold
Can any of the company-specific risk be diversified away by investing in both Red Pine and Lavras 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 Lavras 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 Lavras Gold Corp, you can compare the effects of market volatilities on Red Pine and Lavras 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 Lavras Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Pine and Lavras Gold.
Diversification Opportunities for Red Pine and Lavras Gold
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Red and Lavras is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Red Pine Exploration and Lavras Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavras 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 Lavras Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavras Gold Corp has no effect on the direction of Red Pine i.e., Red Pine and Lavras Gold go up and down completely randomly.
Pair Corralation between Red Pine and Lavras Gold
Assuming the 90 days horizon Red Pine Exploration is expected to generate 1.33 times more return on investment than Lavras Gold. However, Red Pine is 1.33 times more volatile than Lavras Gold Corp. It trades about 0.12 of its potential returns per unit of risk. Lavras Gold Corp is currently generating about -0.01 per unit of risk. If you would invest 8.00 in Red Pine Exploration on November 27, 2024 and sell it today you would earn a total of 0.79 from holding Red Pine Exploration or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Pine Exploration vs. Lavras Gold Corp
Performance |
| Timeline |
| Red Pine Exploration |
| Lavras Gold Corp |
Red Pine and Lavras Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Pine and Lavras Gold
The main advantage of trading using opposite Red Pine and Lavras Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Pine position performs unexpectedly, Lavras 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 Lavras Gold will offset losses from the drop in Lavras 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 |
| Lavras Gold vs. TRU Precious Metals | Lavras Gold vs. Orefinders Resources | Lavras Gold vs. North Peak Resources | Lavras Gold vs. Nine Mile Metals |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |