Correlation Between Vista Gold and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Vista Gold and Canadian Utilities 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 Vista Gold and Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Gold and Canadian Utilities Ltd, you can compare the effects of market volatilities on Vista Gold and Canadian Utilities 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 Vista Gold with a short position of Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Gold and Canadian Utilities.
Diversification Opportunities for Vista Gold and Canadian Utilities
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vista and Canadian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Vista Gold and Canadian Utilities Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities and Vista 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 Vista Gold are associated (or correlated) with Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Vista Gold i.e., Vista Gold and Canadian Utilities go up and down completely randomly.
Pair Corralation between Vista Gold and Canadian Utilities
Assuming the 90 days trading horizon Vista Gold is expected to generate 3.91 times more return on investment than Canadian Utilities. However, Vista Gold is 3.91 times more volatile than Canadian Utilities Ltd. It trades about 0.13 of its potential returns per unit of risk. Canadian Utilities Ltd is currently generating about 0.08 per unit of risk. If you would invest 77.00 in Vista Gold on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Vista Gold or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Gold vs. Canadian Utilities Ltd
Performance |
| Timeline |
| Vista Gold |
| Canadian Utilities |
Vista Gold and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Gold and Canadian Utilities
The main advantage of trading using opposite Vista Gold and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Gold position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| Vista Gold vs. Trigon Metals | Vista Gold vs. RTG Mining | Vista Gold vs. Seabridge Gold | Vista Gold vs. Fremont Gold |
| Canadian Utilities vs. CVW CleanTech | Canadian Utilities vs. Canaf Investments | Canadian Utilities vs. Westshore Terminals Investment | Canadian Utilities vs. Partners Value Investments |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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