Correlation Between Nine Mile and Lavras Gold
Can any of the company-specific risk be diversified away by investing in both Nine Mile and Lavras 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 Nine Mile and Lavras Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Mile Metals and Lavras Gold Corp, you can compare the effects of market volatilities on Nine Mile and Lavras 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 Nine Mile with a short position of Lavras Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Mile and Lavras Gold.
Diversification Opportunities for Nine Mile and Lavras Gold
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nine and Lavras is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nine Mile Metals and Lavras Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavras Gold Corp and Nine Mile 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 Nine Mile Metals are associated (or correlated) with Lavras Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavras Gold Corp has no effect on the direction of Nine Mile i.e., Nine Mile and Lavras Gold go up and down completely randomly.
Pair Corralation between Nine Mile and Lavras Gold
Assuming the 90 days horizon Nine Mile Metals is expected to generate 3.08 times more return on investment than Lavras Gold. However, Nine Mile is 3.08 times more volatile than Lavras Gold Corp. It trades about 0.05 of its potential returns per unit of risk. Lavras Gold Corp is currently generating about -0.03 per unit of risk. If you would invest 2.61 in Nine Mile Metals on August 29, 2024 and sell it today you would lose (0.10) from holding Nine Mile Metals or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Nine Mile Metals vs. Lavras Gold Corp
Performance |
| Timeline |
| Nine Mile Metals |
| Lavras Gold Corp |
Nine Mile and Lavras Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Mile and Lavras Gold
The main advantage of trading using opposite Nine Mile and Lavras Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Mile position performs unexpectedly, Lavras 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 Lavras Gold will offset losses from the drop in Lavras Gold's long position.| Nine Mile vs. Endurance Gold | Nine Mile vs. Red Pine Exploration | Nine Mile vs. Altamira Gold Corp | Nine Mile vs. Grande Portage Resources |
| Lavras Gold vs. TRU Precious Metals | Lavras Gold vs. Orefinders Resources | Lavras Gold vs. North Peak Resources | Lavras Gold vs. Nine Mile Metals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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