Correlation Between Strikepoint Gold and New Age
Can any of the company-specific risk be diversified away by investing in both Strikepoint Gold and New Age 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 Strikepoint Gold and New Age into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strikepoint Gold and New Age Metals, you can compare the effects of market volatilities on Strikepoint Gold and New Age 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 Strikepoint Gold with a short position of New Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strikepoint Gold and New Age.
Diversification Opportunities for Strikepoint Gold and New Age
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Strikepoint and New is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Strikepoint Gold and New Age Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Age Metals and Strikepoint 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 Strikepoint Gold are associated (or correlated) with New Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Age Metals has no effect on the direction of Strikepoint Gold i.e., Strikepoint Gold and New Age go up and down completely randomly.
Pair Corralation between Strikepoint Gold and New Age
Assuming the 90 days horizon Strikepoint Gold is expected to generate 1.27 times more return on investment than New Age. However, Strikepoint Gold is 1.27 times more volatile than New Age Metals. It trades about -0.16 of its potential returns per unit of risk. New Age Metals is currently generating about -0.23 per unit of risk. If you would invest 35.00 in Strikepoint Gold on August 26, 2024 and sell it today you would lose (11.00) from holding Strikepoint Gold or give up 31.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strikepoint Gold vs. New Age Metals
Performance |
| Timeline |
| Strikepoint Gold |
| New Age Metals |
Strikepoint Gold and New Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strikepoint Gold and New Age
The main advantage of trading using opposite Strikepoint Gold and New Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strikepoint Gold position performs unexpectedly, New Age 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 New Age will offset losses from the drop in New Age's long position.| Strikepoint Gold vs. First Majestic Silver | Strikepoint Gold vs. Ivanhoe Energy | Strikepoint Gold vs. Orezone Gold Corp | Strikepoint Gold vs. Faraday Copper Corp |
| New Age vs. First Majestic Silver | New Age vs. Ivanhoe Energy | New Age vs. Orezone Gold Corp | New Age vs. Faraday Copper 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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