Correlation Between K9 Gold and Eagle Plains
Can any of the company-specific risk be diversified away by investing in both K9 Gold and Eagle Plains 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 K9 Gold and Eagle Plains into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K9 Gold Corp and Eagle Plains Resources, you can compare the effects of market volatilities on K9 Gold and Eagle Plains 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 K9 Gold with a short position of Eagle Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of K9 Gold and Eagle Plains.
Diversification Opportunities for K9 Gold and Eagle Plains
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WDFCF and Eagle is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding K9 Gold Corp and Eagle Plains Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Plains Resources and K9 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 K9 Gold Corp are associated (or correlated) with Eagle Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Plains Resources has no effect on the direction of K9 Gold i.e., K9 Gold and Eagle Plains go up and down completely randomly.
Pair Corralation between K9 Gold and Eagle Plains
Assuming the 90 days horizon K9 Gold Corp is expected to generate 0.72 times more return on investment than Eagle Plains. However, K9 Gold Corp is 1.4 times less risky than Eagle Plains. It trades about 0.29 of its potential returns per unit of risk. Eagle Plains Resources is currently generating about 0.16 per unit of risk. If you would invest 5.12 in K9 Gold Corp on November 5, 2024 and sell it today you would earn a total of 3.13 from holding K9 Gold Corp or generate 61.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
K9 Gold Corp vs. Eagle Plains Resources
Performance |
| Timeline |
| K9 Gold Corp |
| Eagle Plains Resources |
K9 Gold and Eagle Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K9 Gold and Eagle Plains
The main advantage of trading using opposite K9 Gold and Eagle Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K9 Gold position performs unexpectedly, Eagle Plains 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 Eagle Plains will offset losses from the drop in Eagle Plains' long position.| K9 Gold vs. Aurwest Resources | K9 Gold vs. Benton Resources | K9 Gold vs. Pan Global Resources | K9 Gold vs. Red Moon Resources |
| Eagle Plains vs. Norra Metals Corp | Eagle Plains vs. E79 Resources Corp | Eagle Plains vs. Voltage Metals Corp | Eagle Plains vs. Cantex Mine Development |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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