Correlation Between EnviroGold Global and Bear Creek

Can any of the company-specific risk be diversified away by investing in both EnviroGold Global and Bear Creek 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 EnviroGold Global and Bear Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EnviroGold Global Limited and Bear Creek Mining, you can compare the effects of market volatilities on EnviroGold Global and Bear Creek 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 EnviroGold Global with a short position of Bear Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnviroGold Global and Bear Creek.

Diversification Opportunities for EnviroGold Global and Bear Creek

0.03

Correlation Coefficient

EnviroGold Global  Bear Creek

Significant diversification

The 3 months correlation between EnviroGold and Bear is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding EnviroGold Global Limited and Bear Creek Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bear Creek Mining and EnviroGold Global 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 EnviroGold Global Limited are associated (or correlated) with Bear Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bear Creek Mining has no effect on the direction of EnviroGold Global i.e., EnviroGold Global and Bear Creek go up and down completely randomly.

Pair Corralation between EnviroGold Global and Bear Creek

Assuming the 90 days horizon EnviroGold Global Limited is expected to generate 1.09 times more return on investment than Bear Creek. However, EnviroGold Global is 1.09 times more volatile than Bear Creek Mining. It trades about 0.18 of its potential returns per unit of risk. Bear Creek Mining is currently generating about -0.1 per unit of risk. If you would invest  3.75  in EnviroGold Global Limited on December 20, 2024 and sell it today you would earn a total of  3.45  from holding EnviroGold Global Limited or generate 92.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

EnviroGold Global Limited  vs.  Bear Creek Mining

EnviroGold Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EnviroGold Global Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, EnviroGold Global reported solid returns over the last few months and may actually be approaching a breakup point.

Bear Creek Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bear Creek Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with EnviroGold Global and Bear Creek

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

The idea behind EnviroGold Global Limited and Bear Creek 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.