Correlation Between Banyan Gold and Galway Metals
Can any of the company-specific risk be diversified away by investing in both Banyan Gold and Galway Metals 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 Banyan Gold and Galway Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banyan Gold Corp and Galway Metals, you can compare the effects of market volatilities on Banyan Gold and Galway Metals 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 Banyan Gold with a short position of Galway Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banyan Gold and Galway Metals.
Diversification Opportunities for Banyan Gold and Galway Metals
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Banyan and Galway is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Banyan Gold Corp and Galway Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galway Metals and Banyan 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 Banyan Gold Corp are associated (or correlated) with Galway Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galway Metals has no effect on the direction of Banyan Gold i.e., Banyan Gold and Galway Metals go up and down completely randomly.
Pair Corralation between Banyan Gold and Galway Metals
Assuming the 90 days horizon Banyan Gold Corp is expected to under-perform the Galway Metals. But the stock apears to be less risky and, when comparing its historical volatility, Banyan Gold Corp is 2.19 times less risky than Galway Metals. The stock trades about -0.07 of its potential returns per unit of risk. The Galway Metals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Galway Metals on September 25, 2024 and sell it today you would earn a total of 3.00 from holding Galway Metals or generate 6.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Banyan Gold Corp vs. Galway Metals
Performance |
Timeline |
Banyan Gold Corp |
Galway Metals |
Banyan Gold and Galway Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banyan Gold and Galway Metals
The main advantage of trading using opposite Banyan Gold and Galway Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banyan Gold position performs unexpectedly, Galway Metals 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 Galway Metals will offset losses from the drop in Galway Metals' long position.Banyan Gold vs. Wildsky Resources | Banyan Gold vs. Q Gold Resources | Banyan Gold vs. Plato Gold Corp | Banyan Gold vs. MAS Gold Corp |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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