Correlation Between Condor Gold and New World

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

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

Diversification Opportunities for Condor Gold and New World

0.46

Correlation Coefficient

Condor Gold  New World

Very weak diversification

The 3 months correlation between Condor and New is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Condor Gold Plc and New World Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Gold and Condor 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 Condor Gold Plc are associated (or correlated) with New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Gold has no effect on the direction of Condor Gold i.e., Condor Gold and New World go up and down completely randomly.

Pair Corralation between Condor Gold and New World

Assuming the 90 days horizon Condor Gold Plc is expected to generate 0.42 times more return on investment than New World. However, Condor Gold Plc is 2.37 times less risky than New World. It trades about -0.01 of its potential returns per unit of risk. New World Gold is currently generating about -0.03 per unit of risk. If you would invest  39.00  in Condor Gold Plc on September 3, 2024 and sell it today you would lose (8.00) from holding Condor Gold Plc or give up 20.51% of portfolio value over 90 days.

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

Condor Gold Plc  vs.  New World Gold

Condor Gold Plc

Risk-Adjusted Performance

0 of 100

Very Weak

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

New World Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New World Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Condor Gold and New World

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

The idea behind Condor Gold Plc and New World 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 Transaction History module to view history of all your transactions and understand their impact on performance.