Correlation Between Bold Ventures and Outcrop Gold

Can any of the company-specific risk be diversified away by investing in both Bold Ventures and Outcrop 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 Bold Ventures and Outcrop Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bold Ventures and Outcrop Gold Corp, you can compare the effects of market volatilities on Bold Ventures and Outcrop 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 Bold Ventures with a short position of Outcrop Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bold Ventures and Outcrop Gold.

Diversification Opportunities for Bold Ventures and Outcrop Gold

0.43

Correlation Coefficient

Bold Ventures  Outcrop Gold

Very weak diversification

The 3 months correlation between Bold and Outcrop is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bold Ventures and Outcrop Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outcrop Gold Corp and Bold Ventures 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 Bold Ventures are associated (or correlated) with Outcrop Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outcrop Gold Corp has no effect on the direction of Bold Ventures i.e., Bold Ventures and Outcrop Gold go up and down completely randomly.

Pair Corralation between Bold Ventures and Outcrop Gold

Assuming the 90 days horizon Bold Ventures is expected to under-perform the Outcrop Gold. In addition to that, Bold Ventures is 1.22 times more volatile than Outcrop Gold Corp. It trades about -0.22 of its total potential returns per unit of risk. Outcrop Gold Corp is currently generating about -0.13 per unit of volatility. If you would invest  22.00  in Outcrop Gold Corp on September 28, 2024 and sell it today you would lose (3.00) from holding Outcrop Gold Corp or give up 13.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bold Ventures  vs.  Outcrop Gold Corp

Bold Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bold Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Outcrop Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Outcrop Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Bold Ventures and Outcrop Gold

The main advantage of trading using opposite Bold Ventures and Outcrop Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bold Ventures position performs unexpectedly, Outcrop 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 Outcrop Gold will offset losses from the drop in Outcrop Gold's long position.

The idea behind Bold Ventures and Outcrop Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..