Correlation Between Dundee Precious and Torex Gold
Can any of the company-specific risk be diversified away by investing in both Dundee Precious and Torex 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 Dundee Precious and Torex Gold 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 Torex Gold Resources, you can compare the effects of market volatilities on Dundee Precious and Torex 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 Dundee Precious with a short position of Torex Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dundee Precious and Torex Gold.
Diversification Opportunities for Dundee Precious and Torex Gold
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dundee and Torex is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dundee Precious Metals and Torex Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torex Gold Resources 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 Torex Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torex Gold Resources has no effect on the direction of Dundee Precious i.e., Dundee Precious and Torex Gold go up and down completely randomly.
Pair Corralation between Dundee Precious and Torex Gold
Assuming the 90 days horizon Dundee Precious Metals is expected to generate 0.57 times more return on investment than Torex Gold. However, Dundee Precious Metals is 1.74 times less risky than Torex Gold. It trades about 0.38 of its potential returns per unit of risk. Torex Gold Resources is currently generating about 0.2 per unit of risk. If you would invest 907.00 in Dundee Precious Metals on December 29, 2024 and sell it today you would earn a total of 413.00 from holding Dundee Precious Metals or generate 45.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dundee Precious Metals vs. Torex Gold Resources
Performance |
Timeline |
Dundee Precious Metals |
Torex Gold Resources |
Dundee Precious and Torex Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dundee Precious and Torex Gold
The main advantage of trading using opposite Dundee Precious and Torex Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dundee Precious position performs unexpectedly, Torex 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 Torex Gold will offset losses from the drop in Torex Gold's long position.Dundee Precious vs. Artemis Gold | Dundee Precious vs. Precipitate Gold Corp | Dundee Precious vs. American Eagle Gold | Dundee Precious vs. Nine Mile Metals |
Torex Gold vs. Edison Cobalt Corp | Torex Gold vs. Champion Bear Resources | Torex Gold vs. Avarone Metals | Torex Gold vs. Adriatic Metals PLC |
Check out your portfolio center.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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