Correlation Between Galiano Gold and Mayfair Gold

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

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

Diversification Opportunities for Galiano Gold and Mayfair Gold

0.49

Correlation Coefficient

Galiano Gold  Mayfair Gold

Very weak diversification

The 3 months correlation between Galiano and Mayfair is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Galiano Gold and Mayfair Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfair Gold Corp and Galiano 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 Galiano Gold are associated (or correlated) with Mayfair Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfair Gold Corp has no effect on the direction of Galiano Gold i.e., Galiano Gold and Mayfair Gold go up and down completely randomly.

Pair Corralation between Galiano Gold and Mayfair Gold

Considering the 90-day investment horizon Galiano Gold is expected to under-perform the Mayfair Gold. In addition to that, Galiano Gold is 1.4 times more volatile than Mayfair Gold Corp. It trades about -0.03 of its total potential returns per unit of risk. Mayfair Gold Corp is currently generating about 0.02 per unit of volatility. If you would invest  130.00  in Mayfair Gold Corp on September 13, 2024 and sell it today you would earn a total of  2.00  from holding Mayfair Gold Corp or generate 1.54% return on investment over 90 days.

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

Galiano Gold  vs.  Mayfair Gold Corp

Galiano Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galiano Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Mayfair Gold Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mayfair Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Mayfair Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Galiano Gold and Mayfair Gold

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

The idea behind Galiano Gold and Mayfair Gold 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.