Correlation Between Caldas Gold and New Pacific

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

Diversification Opportunities for Caldas Gold and New Pacific

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Caldas and New is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Caldas Gold and New Pacific Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Pacific Metals and Caldas 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 Caldas Gold are associated (or correlated) with New Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Pacific Metals has no effect on the direction of Caldas Gold i.e., Caldas Gold and New Pacific go up and down completely randomly.

Pair Corralation between Caldas Gold and New Pacific

If you would invest  18.00  in Caldas Gold on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Caldas Gold or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy5.26%
ValuesDaily Returns

Caldas Gold  vs.  New Pacific Metals

 Performance 
       Timeline  
Caldas Gold 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Caldas Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Caldas Gold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
New Pacific Metals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days New Pacific Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Caldas Gold and New Pacific Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Caldas Gold and New Pacific

The main advantage of trading using opposite Caldas Gold and New Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caldas Gold position performs unexpectedly, New Pacific 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 New Pacific will offset losses from the drop in New Pacific's long position.
The idea behind Caldas Gold and New Pacific Metals 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 Stocks Directory module to find actively traded stocks across global markets.

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