Correlation Between Bravada Gold and Arctic Star

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Can any of the company-specific risk be diversified away by investing in both Bravada Gold and Arctic Star 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 Bravada Gold and Arctic Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bravada Gold and Arctic Star Exploration, you can compare the effects of market volatilities on Bravada Gold and Arctic Star 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 Bravada Gold with a short position of Arctic Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bravada Gold and Arctic Star.

Diversification Opportunities for Bravada Gold and Arctic Star

BravadaArcticDiversified AwayBravadaArcticDiversified Away100%
0.33
  Correlation Coefficient

Weak diversification

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

Pair Corralation between Bravada Gold and Arctic Star

Assuming the 90 days horizon Bravada Gold is expected to generate 1.4 times more return on investment than Arctic Star. However, Bravada Gold is 1.4 times more volatile than Arctic Star Exploration. It trades about 0.06 of its potential returns per unit of risk. Arctic Star Exploration is currently generating about 0.07 per unit of risk. If you would invest  2.25  in Bravada Gold on November 3, 2024 and sell it today you would lose (0.39) from holding Bravada Gold or give up 17.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Bravada Gold  vs.  Arctic Star Exploration

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -60-40-200
JavaScript chart by amCharts 3.21.15BGAVF ASDZF
       Timeline  
Bravada Gold 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Bravada Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Bravada Gold reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanJan0.010.0120.0140.0160.0180.020.022
Arctic Star Exploration 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Arctic Star Exploration are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Arctic Star reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanJanFeb0.0070.0080.0090.010.0110.0120.0130.014

Bravada Gold and Arctic Star Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-48.37-36.23-24.09-11.940.011.8624.3536.8449.3361.82 0.00200.00250.0030
JavaScript chart by amCharts 3.21.15BGAVF ASDZF
       Returns  

Pair Trading with Bravada Gold and Arctic Star

The main advantage of trading using opposite Bravada Gold and Arctic Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bravada Gold position performs unexpectedly, Arctic Star 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 Arctic Star will offset losses from the drop in Arctic Star's long position.
The idea behind Bravada Gold and Arctic Star Exploration 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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