Correlation Between Galantas Gold and Grande Portage

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

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

Diversification Opportunities for Galantas Gold and Grande Portage

0.15

Correlation Coefficient

Galantas Gold  Grande Portage

Average diversification

The 3 months correlation between Galantas and Grande is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Galantas Gold Corp and Grande Portage Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Portage Resources and Galantas 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 Galantas Gold Corp are associated (or correlated) with Grande Portage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Portage Resources has no effect on the direction of Galantas Gold i.e., Galantas Gold and Grande Portage go up and down completely randomly.

Pair Corralation between Galantas Gold and Grande Portage

Assuming the 90 days horizon Galantas Gold Corp is expected to under-perform the Grande Portage. But the stock apears to be less risky and, when comparing its historical volatility, Galantas Gold Corp is 1.06 times less risky than Grande Portage. The stock trades about -0.08 of its potential returns per unit of risk. The Grande Portage Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Grande Portage Resources on September 4, 2024 and sell it today you would earn a total of  3.00  from holding Grande Portage Resources or generate 15.79% return on investment over 90 days.

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

Galantas Gold Corp  vs.  Grande Portage Resources

Galantas Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galantas Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Grande Portage Resources

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grande Portage Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Grande Portage showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galantas Gold and Grande Portage

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

The idea behind Galantas Gold Corp and Grande Portage 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.