Correlation Between Gold Royalty and American Copper

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

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

Diversification Opportunities for Gold Royalty and American Copper

0.0

Correlation Coefficient

Gold Royalty  American Copper

Pay attention - limited upside

The 3 months correlation between Gold and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gold Royalty Corp and American Copper Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Copper Deve and Gold Royalty 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 Gold Royalty Corp are associated (or correlated) with American Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Copper Deve has no effect on the direction of Gold Royalty i.e., Gold Royalty and American Copper go up and down completely randomly.

Pair Corralation between Gold Royalty and American Copper

If you would invest  127.00  in Gold Royalty Corp on September 3, 2024 and sell it today you would earn a total of  2.00  from holding Gold Royalty Corp or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Gold Royalty Corp  vs.  American Copper Development

Gold Royalty Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Royalty Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Gold Royalty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

American Copper Deve

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Copper Development are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, American Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gold Royalty and American Copper

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

The idea behind Gold Royalty Corp and American Copper 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.