Correlation Between Spanish Mountain and Chesapeake Gold
Can any of the company-specific risk be diversified away by investing in both Spanish Mountain and Chesapeake Gold 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 Spanish Mountain and Chesapeake Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spanish Mountain Gold and Chesapeake Gold Corp, you can compare the effects of market volatilities on Spanish Mountain and Chesapeake Gold 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 Spanish Mountain with a short position of Chesapeake Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spanish Mountain and Chesapeake Gold.
Diversification Opportunities for Spanish Mountain and Chesapeake Gold
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spanish and Chesapeake is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Spanish Mountain Gold and Chesapeake Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Gold Corp and Spanish Mountain 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 Spanish Mountain Gold are associated (or correlated) with Chesapeake Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Gold Corp has no effect on the direction of Spanish Mountain i.e., Spanish Mountain and Chesapeake Gold go up and down completely randomly.
Pair Corralation between Spanish Mountain and Chesapeake Gold
Assuming the 90 days horizon Spanish Mountain Gold is expected to under-perform the Chesapeake Gold. But the stock apears to be less risky and, when comparing its historical volatility, Spanish Mountain Gold is 1.22 times less risky than Chesapeake Gold. The stock trades about 0.0 of its potential returns per unit of risk. The Chesapeake Gold Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 196.00 in Chesapeake Gold Corp on September 2, 2024 and sell it today you would lose (87.00) from holding Chesapeake Gold Corp or give up 44.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spanish Mountain Gold vs. Chesapeake Gold Corp
Performance |
| Timeline |
| Spanish Mountain Gold |
| Chesapeake Gold Corp |
Spanish Mountain and Chesapeake Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spanish Mountain and Chesapeake Gold
The main advantage of trading using opposite Spanish Mountain and Chesapeake Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spanish Mountain position performs unexpectedly, Chesapeake Gold 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 Chesapeake Gold will offset losses from the drop in Chesapeake Gold's long position.| Spanish Mountain vs. Strikepoint Gold | Spanish Mountain vs. Kore Mining | Spanish Mountain vs. Unigold | Spanish Mountain vs. Kootenay Silver |
| Chesapeake Gold vs. Bear Creek Mining | Chesapeake Gold vs. Spanish Mountain Gold | Chesapeake Gold vs. Kore Mining | Chesapeake Gold vs. Kootenay Silver |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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