Correlation Between Cartier Iron and Provenance Gold

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

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

Diversification Opportunities for Cartier Iron and Provenance Gold

-0.11

Correlation Coefficient

Cartier Iron  Provenance Gold

Good diversification

The 3 months correlation between Cartier and Provenance is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cartier Iron Corp and Provenance Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provenance Gold Corp and Cartier Iron 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 Cartier Iron Corp are associated (or correlated) with Provenance Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provenance Gold Corp has no effect on the direction of Cartier Iron i.e., Cartier Iron and Provenance Gold go up and down completely randomly.

Pair Corralation between Cartier Iron and Provenance Gold

Assuming the 90 days horizon Cartier Iron Corp is expected to generate 4.16 times more return on investment than Provenance Gold. However, Cartier Iron is 4.16 times more volatile than Provenance Gold Corp. It trades about 0.15 of its potential returns per unit of risk. Provenance Gold Corp is currently generating about -0.06 per unit of risk. If you would invest  4.00  in Cartier Iron Corp on December 22, 2024 and sell it today you would earn a total of  8.00  from holding Cartier Iron Corp or generate 200.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Cartier Iron Corp  vs.  Provenance Gold Corp

Cartier Iron Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cartier Iron Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, Cartier Iron reported solid returns over the last few months and may actually be approaching a breakup point.

Provenance Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Provenance Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cartier Iron and Provenance Gold

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

The idea behind Cartier Iron Corp and Provenance Gold Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.