Correlation Between Brightrock Gold and Perpetua Resources

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

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

Diversification Opportunities for Brightrock Gold and Perpetua Resources

-0.57

Correlation Coefficient

Brightrock Gold  Perpetua Resources

Excellent diversification

The 3 months correlation between Brightrock and Perpetua is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Brightrock Gold Corp and Perpetua Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perpetua Resources Corp and Brightrock 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 Brightrock Gold Corp are associated (or correlated) with Perpetua Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perpetua Resources Corp has no effect on the direction of Brightrock Gold i.e., Brightrock Gold and Perpetua Resources go up and down completely randomly.

Pair Corralation between Brightrock Gold and Perpetua Resources

Given the investment horizon of 90 days Brightrock Gold is expected to generate 90.07 times less return on investment than Perpetua Resources. In addition to that, Brightrock Gold is 1.81 times more volatile than Perpetua Resources Corp. It trades about 0.0 of its total potential returns per unit of risk. Perpetua Resources Corp is currently generating about 0.09 per unit of volatility. If you would invest  280.00  in Perpetua Resources Corp on September 13, 2024 and sell it today you would earn a total of  938.00  from holding Perpetua Resources Corp or generate 335.0% return on investment over 90 days.

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

Brightrock Gold Corp  vs.  Perpetua Resources Corp

Brightrock Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brightrock Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Perpetua Resources Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perpetua Resources Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Perpetua Resources sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brightrock Gold and Perpetua Resources

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

The idea behind Brightrock Gold Corp and Perpetua Resources 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.

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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.