Correlation Between White Gold and Klondike Gold
Can any of the company-specific risk be diversified away by investing in both White Gold and Klondike 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 White Gold and Klondike Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between White Gold Corp and Klondike Gold Corp, you can compare the effects of market volatilities on White Gold and Klondike 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 White Gold with a short position of Klondike Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of White Gold and Klondike Gold.
Diversification Opportunities for White Gold and Klondike Gold
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between White and Klondike is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding White Gold Corp and Klondike Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Gold Corp and White 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 White Gold Corp are associated (or correlated) with Klondike Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Gold Corp has no effect on the direction of White Gold i.e., White Gold and Klondike Gold go up and down completely randomly.
Pair Corralation between White Gold and Klondike Gold
Assuming the 90 days horizon White Gold Corp is expected to under-perform the Klondike Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, White Gold Corp is 1.72 times less risky than Klondike Gold. The otc stock trades about 0.0 of its potential returns per unit of risk. The Klondike Gold Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Klondike Gold Corp on December 2, 2024 and sell it today you would earn a total of 0.00 from holding Klondike Gold Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
White Gold Corp vs. Klondike Gold Corp
Performance |
| Timeline |
| White Gold Corp |
| Klondike Gold Corp |
White Gold and Klondike Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with White Gold and Klondike Gold
The main advantage of trading using opposite White Gold and Klondike Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if White Gold position performs unexpectedly, Klondike 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 Klondike Gold will offset losses from the drop in Klondike Gold's long position.| White Gold vs. Puma Exploration | ||
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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