Correlation Between Moneta Gold and Viva Gold

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

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

Diversification Opportunities for Moneta Gold and Viva Gold

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Correlation Coefficient

Moneta Gold  Viva Gold

Pay attention - limited upside

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

Pair Corralation between Moneta Gold and Viva Gold

Assuming the 90 days horizon Moneta Gold is expected to under-perform the Viva Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Moneta Gold is 2.32 times less risky than Viva Gold. The otc stock trades about -0.07 of its potential returns per unit of risk. The Viva Gold Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Viva Gold Corp on September 14, 2024 and sell it today you would lose (2.10) from holding Viva Gold Corp or give up 17.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	29.09%
Values	Daily Returns

Moneta Gold  vs.  Viva Gold Corp

Moneta Gold

Risk-Adjusted Performance

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Very Weak

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

Viva Gold Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Viva Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Viva Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Moneta Gold and Viva Gold

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

The idea behind Moneta Gold and Viva Gold Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.