Correlation Between 22nd Century and Sitka Gold
Can any of the company-specific risk be diversified away by investing in both 22nd Century and Sitka 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 22nd Century and Sitka Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 22nd Century Group and Sitka Gold Corp, you can compare the effects of market volatilities on 22nd Century and Sitka 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 22nd Century with a short position of Sitka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of 22nd Century and Sitka Gold.
Diversification Opportunities for 22nd Century and Sitka Gold
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 22nd and Sitka is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding 22nd Century Group and Sitka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitka Gold Corp and 22nd Century 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 22nd Century Group are associated (or correlated) with Sitka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitka Gold Corp has no effect on the direction of 22nd Century i.e., 22nd Century and Sitka Gold go up and down completely randomly.
Pair Corralation between 22nd Century and Sitka Gold
Given the investment horizon of 90 days 22nd Century Group is expected to under-perform the Sitka Gold. In addition to that, 22nd Century is 1.49 times more volatile than Sitka Gold Corp. It trades about -0.12 of its total potential returns per unit of risk. Sitka Gold Corp is currently generating about 0.07 per unit of volatility. If you would invest 8.00 in Sitka Gold Corp on August 30, 2024 and sell it today you would earn a total of 19.00 from holding Sitka Gold Corp or generate 237.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
22nd Century Group vs. Sitka Gold Corp
Performance |
| Timeline |
| 22nd Century Group |
| Sitka Gold Corp |
22nd Century and Sitka Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 22nd Century and Sitka Gold
The main advantage of trading using opposite 22nd Century and Sitka Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 22nd Century position performs unexpectedly, Sitka 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 Sitka Gold will offset losses from the drop in Sitka Gold's long position.| 22nd Century vs. Universal | 22nd Century vs. Imperial Brands PLC | 22nd Century vs. British American Tobacco | 22nd Century vs. Philip Morris International |
| Sitka Gold vs. Aurion Resources | Sitka Gold vs. Minera Alamos | Sitka Gold vs. Rio2 Limited | Sitka Gold vs. Roscan Gold Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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