Correlation Between Golden Minerals and Vista Gold

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

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

Diversification Opportunities for Golden Minerals and Vista Gold

0.0

Correlation Coefficient

Golden Minerals  Vista Gold

Pay attention - limited upside

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

Pair Corralation between Golden Minerals and Vista Gold

If you would invest  54.00  in Vista Gold on December 28, 2024 and sell it today you would earn a total of  22.00  from holding Vista Gold or generate 40.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Golden Minerals  vs.  Vista Gold

Golden Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Golden Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Golden Minerals is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Vista Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Gold are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Vista Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golden Minerals and Vista Gold

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

The idea behind Golden Minerals and Vista 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.