Correlation Between Braveheart Resources and P2 Gold

Can any of the company-specific risk be diversified away by investing in both Braveheart Resources and P2 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 Braveheart Resources and P2 Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Braveheart Resources and P2 Gold, you can compare the effects of market volatilities on Braveheart Resources and P2 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 Braveheart Resources with a short position of P2 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braveheart Resources and P2 Gold.

Diversification Opportunities for Braveheart Resources and P2 Gold

0.07

Correlation Coefficient

Braveheart Resources  P2 Gold

Significant diversification

The 3 months correlation between Braveheart and PGLDF is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Braveheart Resources and P2 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on P2 Gold and Braveheart Resources 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 Braveheart Resources are associated (or correlated) with P2 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of P2 Gold has no effect on the direction of Braveheart Resources i.e., Braveheart Resources and P2 Gold go up and down completely randomly.

Pair Corralation between Braveheart Resources and P2 Gold

Assuming the 90 days horizon Braveheart Resources is expected to under-perform the P2 Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Braveheart Resources is 1.9 times less risky than P2 Gold. The otc stock trades about -0.02 of its potential returns per unit of risk. The P2 Gold is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4.40  in P2 Gold on September 3, 2024 and sell it today you would earn a total of  0.30  from holding P2 Gold or generate 6.82% return on investment over 90 days.

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

Braveheart Resources  vs.  P2 Gold

Braveheart Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

P2 Gold

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in P2 Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, P2 Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Braveheart Resources and P2 Gold

The main advantage of trading using opposite Braveheart Resources and P2 Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braveheart Resources position performs unexpectedly, P2 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 P2 Gold will offset losses from the drop in P2 Gold's long position.

The idea behind Braveheart Resources and P2 Gold 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.