Correlation Between Viva Gold and Sibanye Gold
Can any of the company-specific risk be diversified away by investing in both Viva Gold and Sibanye 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 Viva Gold and Sibanye Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viva Gold Corp and Sibanye Gold Ltd, you can compare the effects of market volatilities on Viva Gold and Sibanye 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 Viva Gold with a short position of Sibanye Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viva Gold and Sibanye Gold.
Diversification Opportunities for Viva Gold and Sibanye Gold
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Viva and Sibanye is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Viva Gold Corp and Sibanye Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Gold and Viva 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 Viva Gold Corp are associated (or correlated) with Sibanye Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Gold has no effect on the direction of Viva Gold i.e., Viva Gold and Sibanye Gold go up and down completely randomly.
Pair Corralation between Viva Gold and Sibanye Gold
Assuming the 90 days horizon Viva Gold Corp is expected to generate 1.76 times more return on investment than Sibanye Gold. However, Viva Gold is 1.76 times more volatile than Sibanye Gold Ltd. It trades about 0.03 of its potential returns per unit of risk. Sibanye Gold Ltd is currently generating about -0.02 per unit of risk. If you would invest 10.00 in Viva Gold Corp on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Viva Gold Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viva Gold Corp vs. Sibanye Gold Ltd
Performance |
| Timeline |
| Viva Gold Corp |
| Sibanye Gold |
Viva Gold and Sibanye Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viva Gold and Sibanye Gold
The main advantage of trading using opposite Viva Gold and Sibanye Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viva Gold position performs unexpectedly, Sibanye 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 Sibanye Gold will offset losses from the drop in Sibanye Gold's long position.| Viva Gold vs. Antioquia Gold | Viva Gold vs. Asante Gold | Viva Gold vs. Allegiant Gold | Viva Gold vs. Minera Alamos |
| Sibanye Gold vs. AngloGold Ashanti plc | Sibanye Gold vs. Harmony Gold Mining | Sibanye Gold vs. Eldorado Gold Corp | Sibanye Gold vs. Kinross Gold |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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