Correlation Between Boyd Group and Canagold Resources

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

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

Diversification Opportunities for Boyd Group and Canagold Resources

-0.53

Correlation Coefficient

Boyd Group  Canagold Resources

Excellent diversification

The 3 months correlation between Boyd and Canagold is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Group Services and Canagold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canagold Resources and Boyd Group 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 Boyd Group Services are associated (or correlated) with Canagold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canagold Resources has no effect on the direction of Boyd Group i.e., Boyd Group and Canagold Resources go up and down completely randomly.

Pair Corralation between Boyd Group and Canagold Resources

Assuming the 90 days trading horizon Boyd Group Services is expected to generate 0.41 times more return on investment than Canagold Resources. However, Boyd Group Services is 2.45 times less risky than Canagold Resources. It trades about 0.06 of its potential returns per unit of risk. Canagold Resources is currently generating about -0.08 per unit of risk. If you would invest  20,455  in Boyd Group Services on September 21, 2024 and sell it today you would earn a total of  995.00  from holding Boyd Group Services or generate 4.86% return on investment over 90 days.

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

Boyd Group Services  vs.  Canagold Resources

Boyd Group Services

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Group Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Boyd Group is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Canagold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canagold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Boyd Group and Canagold Resources

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

The idea behind Boyd Group Services and Canagold Resources 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.