Correlation Between Galantas Gold and Infinico Metals

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

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

Diversification Opportunities for Galantas Gold and Infinico Metals

0.57

Correlation Coefficient

Galantas Gold  Infinico Metals

Very weak diversification

The 3 months correlation between Galantas and Infinico is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Galantas Gold Corp and Infinico Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinico Metals Corp and Galantas 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 Galantas Gold Corp are associated (or correlated) with Infinico Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinico Metals Corp has no effect on the direction of Galantas Gold i.e., Galantas Gold and Infinico Metals go up and down completely randomly.

Pair Corralation between Galantas Gold and Infinico Metals

Assuming the 90 days horizon Galantas Gold Corp is expected to under-perform the Infinico Metals. But the stock apears to be less risky and, when comparing its historical volatility, Galantas Gold Corp is 1.64 times less risky than Infinico Metals. The stock trades about 0.0 of its potential returns per unit of risk. The Infinico Metals Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Infinico Metals Corp on December 2, 2024 and sell it today you would lose (1.00) from holding Infinico Metals Corp or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.16%
Values	Daily Returns

Galantas Gold Corp  vs.  Infinico Metals Corp

Galantas Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Galantas Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Galantas Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Infinico Metals Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Infinico Metals Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Infinico Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galantas Gold and Infinico Metals

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

The idea behind Galantas Gold Corp and Infinico Metals Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.