Correlation Between Sokoman Minerals and Moneta Gold

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

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

Diversification Opportunities for Sokoman Minerals and Moneta Gold

0.33

Correlation Coefficient

Sokoman Minerals  Moneta Gold

Weak diversification

The 3 months correlation between Sokoman and Moneta is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sokoman Minerals Corp and Moneta Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moneta Gold and Sokoman Minerals 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 Sokoman Minerals Corp are associated (or correlated) with Moneta Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moneta Gold has no effect on the direction of Sokoman Minerals i.e., Sokoman Minerals and Moneta Gold go up and down completely randomly.

Pair Corralation between Sokoman Minerals and Moneta Gold

If you would invest  2.89  in Sokoman Minerals Corp on September 15, 2024 and sell it today you would lose (0.55) from holding Sokoman Minerals Corp or give up 19.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Sokoman Minerals Corp  vs.  Moneta Gold

Sokoman Minerals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sokoman Minerals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Sokoman Minerals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Moneta Gold

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Sokoman Minerals and Moneta Gold

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

The idea behind Sokoman Minerals Corp and Moneta 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.