Correlation Between Gold Reserve and K92 Mining

Can any of the company-specific risk be diversified away by investing in both Gold Reserve and K92 Mining 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 Gold Reserve and K92 Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gold Reserve and K92 Mining, you can compare the effects of market volatilities on Gold Reserve and K92 Mining 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 Gold Reserve with a short position of K92 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Reserve and K92 Mining.

Diversification Opportunities for Gold Reserve and K92 Mining

0.32

Correlation Coefficient

Gold Reserve  K92 Mining

Weak diversification

The 3 months correlation between Gold and K92 is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Gold Reserve and K92 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K92 Mining and Gold Reserve 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 Gold Reserve are associated (or correlated) with K92 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K92 Mining has no effect on the direction of Gold Reserve i.e., Gold Reserve and K92 Mining go up and down completely randomly.

Pair Corralation between Gold Reserve and K92 Mining

Assuming the 90 days horizon Gold Reserve is expected to under-perform the K92 Mining. But the otc stock apears to be less risky and, when comparing its historical volatility, Gold Reserve is 1.41 times less risky than K92 Mining. The otc stock trades about -0.08 of its potential returns per unit of risk. The K92 Mining is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  593.00  in K92 Mining on October 27, 2024 and sell it today you would earn a total of  86.00  from holding K92 Mining or generate 14.5% return on investment over 90 days.

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

Gold Reserve  vs.  K92 Mining

Gold Reserve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Reserve 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 basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

K92 Mining

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in K92 Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, K92 Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gold Reserve and K92 Mining

The main advantage of trading using opposite Gold Reserve and K92 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Reserve position performs unexpectedly, K92 Mining 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 K92 Mining will offset losses from the drop in K92 Mining's long position.

The idea behind Gold Reserve and K92 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.