Correlation Between Dundee Precious and Jaguar Mining

Can any of the company-specific risk be diversified away by investing in both Dundee Precious and Jaguar Mining 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 Dundee Precious and Jaguar Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dundee Precious Metals and Jaguar Mining, you can compare the effects of market volatilities on Dundee Precious and Jaguar Mining 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 Dundee Precious with a short position of Jaguar Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dundee Precious and Jaguar Mining.

Diversification Opportunities for Dundee Precious and Jaguar Mining

0.72

Correlation Coefficient

Dundee Precious  Jaguar Mining

Poor diversification

The 3 months correlation between Dundee and Jaguar is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dundee Precious Metals and Jaguar Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Mining and Dundee Precious 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 Dundee Precious Metals are associated (or correlated) with Jaguar Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Mining has no effect on the direction of Dundee Precious i.e., Dundee Precious and Jaguar Mining go up and down completely randomly.

Pair Corralation between Dundee Precious and Jaguar Mining

Assuming the 90 days trading horizon Dundee Precious Metals is expected to generate 0.39 times more return on investment than Jaguar Mining. However, Dundee Precious Metals is 2.56 times less risky than Jaguar Mining. It trades about 0.36 of its potential returns per unit of risk. Jaguar Mining is currently generating about 0.13 per unit of risk. If you would invest  1,301  in Dundee Precious Metals on December 22, 2024 and sell it today you would earn a total of  548.00  from holding Dundee Precious Metals or generate 42.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Dundee Precious Metals  vs.  Jaguar Mining

Dundee Precious Metals

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dundee Precious Metals are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Dundee Precious displayed solid returns over the last few months and may actually be approaching a breakup point.

Jaguar Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jaguar Mining are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Jaguar Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dundee Precious and Jaguar Mining

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

The idea behind Dundee Precious Metals and Jaguar Mining 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.