Correlation Between Sabre Gold and Grande Portage
Can any of the company-specific risk be diversified away by investing in both Sabre Gold and Grande Portage 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 Grande Portage 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 Grande Portage Resources, you can compare the effects of market volatilities on Sabre Gold and Grande Portage 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 Grande Portage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Gold and Grande Portage.
Diversification Opportunities for Sabre Gold and Grande Portage
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabre and Grande is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Gold Mines and Grande Portage Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Portage Resources 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 Grande Portage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Portage Resources has no effect on the direction of Sabre Gold i.e., Sabre Gold and Grande Portage go up and down completely randomly.
Pair Corralation between Sabre Gold and Grande Portage
Assuming the 90 days horizon Sabre Gold Mines is expected to generate 1.01 times more return on investment than Grande Portage. However, Sabre Gold is 1.01 times more volatile than Grande Portage Resources. It trades about -0.05 of its potential returns per unit of risk. Grande Portage Resources is currently generating about -0.1 per unit of risk. If you would invest 15.00 in Sabre Gold Mines on September 13, 2024 and sell it today you would lose (1.00) from holding Sabre Gold Mines or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Gold Mines vs. Grande Portage Resources
Performance |
| Timeline |
| Sabre Gold Mines |
| Grande Portage Resources |
Sabre Gold and Grande Portage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Gold and Grande Portage
The main advantage of trading using opposite Sabre Gold and Grande Portage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Gold position performs unexpectedly, Grande Portage 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 Grande Portage will offset losses from the drop in Grande Portage's long position.| Sabre Gold vs. Thunder Mountain Gold | Sabre Gold vs. Romios Gold Resources | Sabre Gold vs. Kootenay Silver | Sabre Gold vs. Grande Portage Resources |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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