Correlation Between Vista Gold and Diamond Fields
Can any of the company-specific risk be diversified away by investing in both Vista Gold and Diamond Fields 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 Diamond Fields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Gold and Diamond Fields Resources, you can compare the effects of market volatilities on Vista Gold and Diamond Fields 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 Diamond Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Gold and Diamond Fields.
Diversification Opportunities for Vista Gold and Diamond Fields
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vista and Diamond is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Vista Gold and Diamond Fields Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Fields Resources 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 Diamond Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Fields Resources has no effect on the direction of Vista Gold i.e., Vista Gold and Diamond Fields go up and down completely randomly.
Pair Corralation between Vista Gold and Diamond Fields
Assuming the 90 days trading horizon Vista Gold is expected to generate 0.46 times more return on investment than Diamond Fields. However, Vista Gold is 2.16 times less risky than Diamond Fields. It trades about 0.06 of its potential returns per unit of risk. Diamond Fields Resources is currently generating about 0.02 per unit of risk. If you would invest 69.00 in Vista Gold on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Vista Gold or generate 23.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Gold vs. Diamond Fields Resources
Performance |
| Timeline |
| Vista Gold |
| Diamond Fields Resources |
Vista Gold and Diamond Fields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Gold and Diamond Fields
The main advantage of trading using opposite Vista Gold and Diamond Fields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Gold position performs unexpectedly, Diamond Fields 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 Diamond Fields will offset losses from the drop in Diamond Fields' long position.| Vista Gold vs. Trigon Metals | Vista Gold vs. RTG Mining | Vista Gold vs. Seabridge Gold | Vista Gold vs. Fremont Gold |
| Diamond Fields vs. Maple Peak Investments | Diamond Fields vs. Tree Island Steel | Diamond Fields vs. Bip Investment Corp | Diamond Fields vs. Westshore Terminals Investment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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