Correlation Between Vista Gold and Sabio Holdings
Can any of the company-specific risk be diversified away by investing in both Vista Gold and Sabio Holdings 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 Sabio Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Gold and Sabio Holdings, you can compare the effects of market volatilities on Vista Gold and Sabio Holdings 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 Sabio Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Gold and Sabio Holdings.
Diversification Opportunities for Vista Gold and Sabio Holdings
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vista and Sabio is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vista Gold and Sabio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabio Holdings 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 Sabio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabio Holdings has no effect on the direction of Vista Gold i.e., Vista Gold and Sabio Holdings go up and down completely randomly.
Pair Corralation between Vista Gold and Sabio Holdings
Assuming the 90 days trading horizon Vista Gold is expected to generate 1.28 times less return on investment than Sabio Holdings. But when comparing it to its historical volatility, Vista Gold is 1.39 times less risky than Sabio Holdings. It trades about 0.07 of its potential returns per unit of risk. Sabio Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Sabio Holdings on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Sabio Holdings or generate 47.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Gold vs. Sabio Holdings
Performance |
| Timeline |
| Vista Gold |
| Sabio Holdings |
Vista Gold and Sabio Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Gold and Sabio Holdings
The main advantage of trading using opposite Vista Gold and Sabio Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Gold position performs unexpectedly, Sabio Holdings 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 Sabio Holdings will offset losses from the drop in Sabio Holdings' long position.| Vista Gold vs. Trigon Metals | Vista Gold vs. RTG Mining | Vista Gold vs. Seabridge Gold | Vista Gold vs. Fremont Gold |
| Sabio Holdings vs. Medical Facilities | Sabio Holdings vs. UnitedHealth Group CDR | Sabio Holdings vs. iSign Media Solutions | Sabio Holdings vs. Network Media Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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