Correlation Between Strikepoint Gold and Sable Resources
Can any of the company-specific risk be diversified away by investing in both Strikepoint Gold and Sable Resources 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 Sable Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strikepoint Gold and Sable Resources, you can compare the effects of market volatilities on Strikepoint Gold and Sable Resources 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 Sable Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strikepoint Gold and Sable Resources.
Diversification Opportunities for Strikepoint Gold and Sable Resources
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Strikepoint and Sable is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Strikepoint Gold and Sable Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Resources 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 Sable Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Resources has no effect on the direction of Strikepoint Gold i.e., Strikepoint Gold and Sable Resources go up and down completely randomly.
Pair Corralation between Strikepoint Gold and Sable Resources
Assuming the 90 days horizon Strikepoint Gold is expected to under-perform the Sable Resources. But the stock apears to be less risky and, when comparing its historical volatility, Strikepoint Gold is 1.03 times less risky than Sable Resources. The stock trades about -0.16 of its potential returns per unit of risk. The Sable Resources is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Sable Resources on September 15, 2024 and sell it today you would lose (0.50) from holding Sable Resources or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Strikepoint Gold vs. Sable Resources
Performance |
| Timeline |
| Strikepoint Gold |
| Sable Resources |
Strikepoint Gold and Sable Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strikepoint Gold and Sable Resources
The main advantage of trading using opposite Strikepoint Gold and Sable Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strikepoint Gold position performs unexpectedly, Sable Resources 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 Sable Resources will offset losses from the drop in Sable Resources' long position.| Strikepoint Gold vs. Foraco International SA | Strikepoint Gold vs. Geodrill Limited | Strikepoint Gold vs. Major Drilling Group | Strikepoint Gold vs. Bri Chem Corp |
| Sable Resources vs. Outcrop Gold Corp | Sable Resources vs. Strikepoint Gold | Sable Resources vs. Defiance Silver Corp | Sable Resources vs. Eskay Mining 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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