Correlation Between Dacian Gold and Bluestone Resources

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

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

Diversification Opportunities for Dacian Gold and Bluestone Resources

0.37

Correlation Coefficient

Dacian Gold  Bluestone Resources

Weak diversification

The 3 months correlation between Dacian and Bluestone is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dacian Gold Limited and Bluestone Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluestone Resources and Dacian 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 Dacian Gold Limited are associated (or correlated) with Bluestone Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluestone Resources has no effect on the direction of Dacian Gold i.e., Dacian Gold and Bluestone Resources go up and down completely randomly.

Pair Corralation between Dacian Gold and Bluestone Resources

If you would invest  22.00  in Bluestone Resources on September 16, 2024 and sell it today you would lose (1.00) from holding Bluestone Resources or give up 4.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Dacian Gold Limited  vs.  Bluestone Resources

Dacian Gold Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bluestone Resources

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Dacian Gold and Bluestone Resources

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

The idea behind Dacian Gold Limited and Bluestone 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.