Correlation Between Conquest Resources and Carlin Gold

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

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

Diversification Opportunities for Conquest Resources and Carlin Gold

-0.01

Correlation Coefficient

Conquest Resources  Carlin Gold

Good diversification

The 3 months correlation between Conquest and Carlin is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Conquest Resources and Carlin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlin Gold and Conquest Resources 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 Conquest Resources are associated (or correlated) with Carlin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlin Gold has no effect on the direction of Conquest Resources i.e., Conquest Resources and Carlin Gold go up and down completely randomly.

Pair Corralation between Conquest Resources and Carlin Gold

Assuming the 90 days horizon Conquest Resources is expected to generate 1.32 times less return on investment than Carlin Gold. In addition to that, Conquest Resources is 1.68 times more volatile than Carlin Gold. It trades about 0.05 of its total potential returns per unit of risk. Carlin Gold is currently generating about 0.11 per unit of volatility. If you would invest  15.00  in Carlin Gold on December 30, 2024 and sell it today you would earn a total of  6.00  from holding Carlin Gold or generate 40.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Conquest Resources  vs.  Carlin Gold

Conquest Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Conquest Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Conquest Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Carlin Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlin Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Carlin Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Conquest Resources and Carlin Gold

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

The idea behind Conquest Resources and Carlin 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.