Correlation Between Sitka Gold and Great Elm
Can any of the company-specific risk be diversified away by investing in both Sitka Gold and Great Elm 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 Great Elm 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 Great Elm Capital, you can compare the effects of market volatilities on Sitka Gold and Great Elm 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 Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitka Gold and Great Elm.
Diversification Opportunities for Sitka Gold and Great Elm
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sitka and Great is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sitka Gold Corp and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital 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 Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of Sitka Gold i.e., Sitka Gold and Great Elm go up and down completely randomly.
Pair Corralation between Sitka Gold and Great Elm
Assuming the 90 days horizon Sitka Gold Corp is expected to generate 32.92 times more return on investment than Great Elm. However, Sitka Gold is 32.92 times more volatile than Great Elm Capital. It trades about 0.03 of its potential returns per unit of risk. Great Elm Capital is currently generating about -0.1 per unit of risk. If you would invest 32.00 in Sitka Gold Corp on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Sitka Gold Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitka Gold Corp vs. Great Elm Capital
Performance |
| Timeline |
| Sitka Gold Corp |
| Great Elm Capital |
Sitka Gold and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitka Gold and Great Elm
The main advantage of trading using opposite Sitka Gold and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitka Gold position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm'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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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