Correlation Between Gold Terra and Baru Gold
Can any of the company-specific risk be diversified away by investing in both Gold Terra and Baru 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 Gold Terra and Baru Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Terra Resource and Baru Gold Corp, you can compare the effects of market volatilities on Gold Terra and Baru 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 Gold Terra with a short position of Baru Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Terra and Baru Gold.
Diversification Opportunities for Gold Terra and Baru Gold
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gold and Baru is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Gold Terra Resource and Baru Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baru Gold Corp and Gold Terra 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 Gold Terra Resource are associated (or correlated) with Baru Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baru Gold Corp has no effect on the direction of Gold Terra i.e., Gold Terra and Baru Gold go up and down completely randomly.
Pair Corralation between Gold Terra and Baru Gold
Assuming the 90 days horizon Gold Terra Resource is expected to generate 0.81 times more return on investment than Baru Gold. However, Gold Terra Resource is 1.23 times less risky than Baru Gold. It trades about 0.2 of its potential returns per unit of risk. Baru Gold Corp is currently generating about -0.02 per unit of risk. If you would invest 3.90 in Gold Terra Resource on October 23, 2024 and sell it today you would earn a total of 0.74 from holding Gold Terra Resource or generate 18.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Gold Terra Resource vs. Baru Gold Corp
Performance |
| Timeline |
| Gold Terra Resource |
| Baru Gold Corp |
Gold Terra and Baru Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Terra and Baru Gold
The main advantage of trading using opposite Gold Terra and Baru Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Terra position performs unexpectedly, Baru 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 Baru Gold will offset losses from the drop in Baru Gold's long position.| Gold Terra vs. Palamina Corp | Gold Terra vs. Gold Springs Resource | Gold Terra vs. BTU Metals Corp | Gold Terra vs. Norsemont Mining |
| Baru Gold vs. Allegiant Gold | Baru Gold vs. 1911 Gold Corp | Baru Gold vs. Altamira Gold Corp | Baru Gold vs. Gold Terra Resource |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |