Correlation Between Dakota Gold and Vista Gold

Can any of the company-specific risk be diversified away by investing in both Dakota Gold and Vista 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 Dakota Gold and Vista Gold 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 Vista Gold, you can compare the effects of market volatilities on Dakota Gold and Vista 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 Dakota Gold with a short position of Vista Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dakota Gold and Vista Gold.

Diversification Opportunities for Dakota Gold and Vista Gold

0.64

Correlation Coefficient

Dakota Gold  Vista Gold

Poor diversification

The 3 months correlation between Dakota and Vista is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dakota Gold Corp and Vista Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Gold 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 Vista Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Gold has no effect on the direction of Dakota Gold i.e., Dakota Gold and Vista Gold go up and down completely randomly.

Pair Corralation between Dakota Gold and Vista Gold

Allowing for the 90-day total investment horizon Dakota Gold is expected to generate 1.84 times less return on investment than Vista Gold. But when comparing it to its historical volatility, Dakota Gold Corp is 1.15 times less risky than Vista Gold. It trades about 0.02 of its potential returns per unit of risk. Vista Gold is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  54.00  in Vista Gold on December 2, 2024 and sell it today you would earn a total of  9.00  from holding Vista Gold or generate 16.67% return on investment over 90 days.

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

Dakota Gold Corp  vs.  Vista Gold

Dakota Gold Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dakota Gold Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental indicators, Dakota Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

Vista Gold

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Vista Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Dakota Gold and Vista Gold

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

The idea behind Dakota Gold Corp and Vista 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.