Correlation Between Sitka Gold and Nationwide Highmark
Can any of the company-specific risk be diversified away by investing in both Sitka Gold and Nationwide Highmark 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 Nationwide Highmark 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 Nationwide Highmark Small, you can compare the effects of market volatilities on Sitka Gold and Nationwide Highmark 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 Nationwide Highmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitka Gold and Nationwide Highmark.
Diversification Opportunities for Sitka Gold and Nationwide Highmark
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sitka and Nationwide is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sitka Gold Corp and Nationwide Highmark Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Highmark Small 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 Nationwide Highmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Highmark Small has no effect on the direction of Sitka Gold i.e., Sitka Gold and Nationwide Highmark go up and down completely randomly.
Pair Corralation between Sitka Gold and Nationwide Highmark
Assuming the 90 days horizon Sitka Gold Corp is expected to generate 5.93 times more return on investment than Nationwide Highmark. However, Sitka Gold is 5.93 times more volatile than Nationwide Highmark Small. It trades about 0.08 of its potential returns per unit of risk. Nationwide Highmark Small is currently generating about 0.06 per unit of risk. If you would invest 13.00 in Sitka Gold Corp on September 3, 2024 and sell it today you would earn a total of 19.00 from holding Sitka Gold Corp or generate 146.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.68% |
| Values | Daily Returns |
Sitka Gold Corp vs. Nationwide Highmark Small
Performance |
| Timeline |
| Sitka Gold Corp |
| Nationwide Highmark Small |
Sitka Gold and Nationwide Highmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitka Gold and Nationwide Highmark
The main advantage of trading using opposite Sitka Gold and Nationwide Highmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitka Gold position performs unexpectedly, Nationwide Highmark 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 Nationwide Highmark will offset losses from the drop in Nationwide Highmark's long position.| Sitka Gold vs. Aurion Resources | Sitka Gold vs. Minera Alamos | Sitka Gold vs. Rio2 Limited | Sitka Gold vs. Roscan Gold Corp |
| Nationwide Highmark vs. Nationwide Highmark Small | Nationwide Highmark vs. Nationwide Highmark Small | Nationwide Highmark vs. Janus Venture Fund | Nationwide Highmark vs. The Hartford Midcap |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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