Correlation Between Sitka Gold and Goldenstone Acquisition
Can any of the company-specific risk be diversified away by investing in both Sitka Gold and Goldenstone Acquisition 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 Sitka Gold and Goldenstone Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitka Gold Corp and Goldenstone Acquisition, you can compare the effects of market volatilities on Sitka Gold and Goldenstone Acquisition 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 Sitka Gold with a short position of Goldenstone Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitka Gold and Goldenstone Acquisition.
Diversification Opportunities for Sitka Gold and Goldenstone Acquisition
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sitka and Goldenstone is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sitka Gold Corp and Goldenstone Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldenstone Acquisition and Sitka 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 Sitka Gold Corp are associated (or correlated) with Goldenstone Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldenstone Acquisition has no effect on the direction of Sitka Gold i.e., Sitka Gold and Goldenstone Acquisition go up and down completely randomly.
Pair Corralation between Sitka Gold and Goldenstone Acquisition
Assuming the 90 days horizon Sitka Gold Corp is expected to under-perform the Goldenstone Acquisition. In addition to that, Sitka Gold is 9.41 times more volatile than Goldenstone Acquisition. It trades about -0.25 of its total potential returns per unit of risk. Goldenstone Acquisition is currently generating about 0.24 per unit of volatility. If you would invest 1,129 in Goldenstone Acquisition on November 2, 2024 and sell it today you would earn a total of 36.00 from holding Goldenstone Acquisition or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitka Gold Corp vs. Goldenstone Acquisition
Performance |
| Timeline |
| Sitka Gold Corp |
| Goldenstone Acquisition |
Sitka Gold and Goldenstone Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitka Gold and Goldenstone Acquisition
The main advantage of trading using opposite Sitka Gold and Goldenstone Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitka Gold position performs unexpectedly, Goldenstone Acquisition 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 Goldenstone Acquisition will offset losses from the drop in Goldenstone Acquisition's long position.| Sitka Gold vs. Aurion Resources | Sitka Gold vs. Minera Alamos | Sitka Gold vs. Rio2 Limited | Sitka Gold vs. Roscan Gold 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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