Correlation Between Descartes Systems and Condor Gold

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

By analyzing existing cross correlation between Descartes Systems Group and Condor Gold Plc, you can compare the effects of market volatilities on Descartes Systems and Condor 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 Descartes Systems with a short position of Condor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Descartes Systems and Condor Gold.

Diversification Opportunities for Descartes Systems and Condor Gold

-0.27

Correlation Coefficient

Descartes Systems  Condor Gold

Very good diversification

The 3 months correlation between Descartes and Condor is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Descartes Systems Group and Condor Gold Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Gold Plc and Descartes Systems 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 Descartes Systems Group are associated (or correlated) with Condor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Gold Plc has no effect on the direction of Descartes Systems i.e., Descartes Systems and Condor Gold go up and down completely randomly.

Pair Corralation between Descartes Systems and Condor Gold

Assuming the 90 days trading horizon Descartes Systems is expected to generate 3.15 times less return on investment than Condor Gold. But when comparing it to its historical volatility, Descartes Systems Group is 5.04 times less risky than Condor Gold. It trades about 0.28 of its potential returns per unit of risk. Condor Gold Plc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  39.00  in Condor Gold Plc on September 4, 2024 and sell it today you would earn a total of  10.00  from holding Condor Gold Plc or generate 25.64% return on investment over 90 days.

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

Descartes Systems Group  vs.  Condor Gold Plc

Descartes Systems

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Descartes Systems Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Descartes Systems displayed solid returns over the last few months and may actually be approaching a breakup point.

Condor Gold Plc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Condor Gold Plc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Condor Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Descartes Systems and Condor Gold

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

The idea behind Descartes Systems Group and Condor Gold Plc 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 Global Correlations module to find global opportunities by holding instruments from different markets.