Correlation Between Dakota Gold and Bluestone Resources

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

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

Diversification Opportunities for Dakota Gold and Bluestone Resources

0.14

Correlation Coefficient

Dakota Gold  Bluestone Resources

Average diversification

The 3 months correlation between Dakota and Bluestone is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dakota Gold Corp and Bluestone Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluestone Resources and Dakota 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 Dakota Gold Corp are associated (or correlated) with Bluestone Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluestone Resources has no effect on the direction of Dakota Gold i.e., Dakota Gold and Bluestone Resources go up and down completely randomly.

Pair Corralation between Dakota Gold and Bluestone Resources

Allowing for the 90-day total investment horizon Dakota Gold Corp is expected to generate 0.48 times more return on investment than Bluestone Resources. However, Dakota Gold Corp is 2.09 times less risky than Bluestone Resources. It trades about -0.01 of its potential returns per unit of risk. Bluestone Resources is currently generating about -0.01 per unit of risk. If you would invest  259.00  in Dakota Gold Corp on September 12, 2024 and sell it today you would lose (31.00) from holding Dakota Gold Corp or give up 11.97% of portfolio value over 90 days.

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

Dakota Gold Corp  vs.  Bluestone Resources

Dakota Gold Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dakota Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Dakota Gold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bluestone Resources

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bluestone Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Bluestone Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dakota Gold and Bluestone Resources

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

The idea behind Dakota Gold Corp and Bluestone Resources 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.