Correlation Between Baroyeca Gold and Cantex Mine

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

By analyzing existing cross correlation between Baroyeca Gold Silver and Cantex Mine Development, you can compare the effects of market volatilities on Baroyeca Gold and Cantex Mine 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 Baroyeca Gold with a short position of Cantex Mine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baroyeca Gold and Cantex Mine.

Diversification Opportunities for Baroyeca Gold and Cantex Mine

0.01

Correlation Coefficient

Baroyeca Gold  Cantex Mine

Significant diversification

The 3 months correlation between Baroyeca and Cantex is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Baroyeca Gold Silver and Cantex Mine Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantex Mine Development and Baroyeca 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 Baroyeca Gold Silver are associated (or correlated) with Cantex Mine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantex Mine Development has no effect on the direction of Baroyeca Gold i.e., Baroyeca Gold and Cantex Mine go up and down completely randomly.

Pair Corralation between Baroyeca Gold and Cantex Mine

Assuming the 90 days horizon Baroyeca Gold Silver is expected to generate 1.15 times more return on investment than Cantex Mine. However, Baroyeca Gold is 1.15 times more volatile than Cantex Mine Development. It trades about 0.0 of its potential returns per unit of risk. Cantex Mine Development is currently generating about -0.02 per unit of risk. If you would invest  1.70  in Baroyeca Gold Silver on September 2, 2024 and sell it today you would lose (0.28) from holding Baroyeca Gold Silver or give up 16.47% of portfolio value over 90 days.

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

Baroyeca Gold Silver  vs.  Cantex Mine Development

Baroyeca Gold Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baroyeca Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Baroyeca Gold is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Cantex Mine Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cantex Mine Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Baroyeca Gold and Cantex Mine

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

The idea behind Baroyeca Gold Silver and Cantex Mine Development 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.