Correlation Between US Gold and Clarity Gold
Can any of the company-specific risk be diversified away by investing in both US Gold and Clarity 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 US Gold and Clarity Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Gold Corp and Clarity Gold Corp, you can compare the effects of market volatilities on US Gold and Clarity 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 US Gold with a short position of Clarity Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Gold and Clarity Gold.
Diversification Opportunities for US Gold and Clarity Gold
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USAU and Clarity is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding US Gold Corp and Clarity Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarity Gold Corp and US 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 US Gold Corp are associated (or correlated) with Clarity Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarity Gold Corp has no effect on the direction of US Gold i.e., US Gold and Clarity Gold go up and down completely randomly.
Pair Corralation between US Gold and Clarity Gold
Given the investment horizon of 90 days US Gold Corp is expected to generate 0.34 times more return on investment than Clarity Gold. However, US Gold Corp is 2.97 times less risky than Clarity Gold. It trades about 0.09 of its potential returns per unit of risk. Clarity Gold Corp is currently generating about 0.03 per unit of risk. If you would invest 367.00 in US Gold Corp on September 14, 2024 and sell it today you would earn a total of 339.00 from holding US Gold Corp or generate 92.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
US Gold Corp vs. Clarity Gold Corp
Performance |
| Timeline |
| US Gold Corp |
| Clarity Gold Corp |
US Gold and Clarity Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Gold and Clarity Gold
The main advantage of trading using opposite US Gold and Clarity Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Gold position performs unexpectedly, Clarity 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 Clarity Gold will offset losses from the drop in Clarity Gold's long position.| US Gold vs. Labrador Gold Corp | US Gold vs. Aurion Resources | US Gold vs. Puma Exploration | US Gold vs. Golden Star Resource |
| Clarity Gold vs. Revival Gold | Clarity Gold vs. Galiano Gold | Clarity Gold vs. US Gold Corp | Clarity Gold vs. HUMANA INC |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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