Correlation Between Galantas Gold and Talon Metals

Can any of the company-specific risk be diversified away by investing in both Galantas Gold and Talon 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 Talon 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 Talon Metals Corp, you can compare the effects of market volatilities on Galantas Gold and Talon 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 Talon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galantas Gold and Talon Metals.

Diversification Opportunities for Galantas Gold and Talon Metals

0.54

Correlation Coefficient

Galantas Gold  Talon Metals

Very weak diversification

The 3 months correlation between Galantas and Talon is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Galantas Gold Corp and Talon Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talon 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 Talon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talon Metals Corp has no effect on the direction of Galantas Gold i.e., Galantas Gold and Talon Metals go up and down completely randomly.

Pair Corralation between Galantas Gold and Talon Metals

Assuming the 90 days horizon Galantas Gold Corp is expected to under-perform the Talon Metals. In addition to that, Galantas Gold is 1.53 times more volatile than Talon Metals Corp. It trades about -0.05 of its total potential returns per unit of risk. Talon Metals Corp is currently generating about 0.02 per unit of volatility. If you would invest  9.00  in Talon Metals Corp on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Talon Metals Corp or generate 0.0% return on investment over 90 days.

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

Galantas Gold Corp  vs.  Talon Metals Corp

Galantas Gold Corp

Risk-Adjusted Performance

0 of 100

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Talon Metals Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Talon Metals Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Talon Metals is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Galantas Gold and Talon Metals

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

The idea behind Galantas Gold Corp and Talon 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..