Correlation Between Sabre Gold and Goldgroup Mining
Can any of the company-specific risk be diversified away by investing in both Sabre Gold and Goldgroup Mining 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 Sabre Gold and Goldgroup Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre Gold Mines and Goldgroup Mining, you can compare the effects of market volatilities on Sabre Gold and Goldgroup Mining 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 Sabre Gold with a short position of Goldgroup Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Gold and Goldgroup Mining.
Diversification Opportunities for Sabre Gold and Goldgroup Mining
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabre and Goldgroup is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Gold Mines and Goldgroup Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldgroup Mining and Sabre 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 Sabre Gold Mines are associated (or correlated) with Goldgroup Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldgroup Mining has no effect on the direction of Sabre Gold i.e., Sabre Gold and Goldgroup Mining go up and down completely randomly.
Pair Corralation between Sabre Gold and Goldgroup Mining
Assuming the 90 days horizon Sabre Gold is expected to generate 7.31 times less return on investment than Goldgroup Mining. But when comparing it to its historical volatility, Sabre Gold Mines is 2.91 times less risky than Goldgroup Mining. It trades about 0.03 of its potential returns per unit of risk. Goldgroup Mining is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Goldgroup Mining on September 14, 2024 and sell it today you would earn a total of 0.07 from holding Goldgroup Mining or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Gold Mines vs. Goldgroup Mining
Performance |
| Timeline |
| Sabre Gold Mines |
| Goldgroup Mining |
Sabre Gold and Goldgroup Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Gold and Goldgroup Mining
The main advantage of trading using opposite Sabre Gold and Goldgroup Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Gold position performs unexpectedly, Goldgroup Mining 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 Goldgroup Mining will offset losses from the drop in Goldgroup Mining's long position.| Sabre Gold vs. Papaya Growth Opportunity | Sabre Gold vs. HUMANA INC | Sabre Gold vs. Barloworld Ltd ADR | Sabre Gold vs. Morningstar Unconstrained Allocation |
| Goldgroup Mining vs. Antioquia Gold | Goldgroup Mining vs. Asante Gold | Goldgroup Mining vs. Bluestone Resources | Goldgroup Mining vs. Big Ridge Gold |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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