Correlation Between Cassiar Gold and Mammoth Resources

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

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

Diversification Opportunities for Cassiar Gold and Mammoth Resources

0.55

Correlation Coefficient

Cassiar Gold  Mammoth Resources

Very weak diversification

The 3 months correlation between Cassiar and Mammoth is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cassiar Gold Corp and Mammoth Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Resources Corp and Cassiar 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 Cassiar Gold Corp are associated (or correlated) with Mammoth Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Resources Corp has no effect on the direction of Cassiar Gold i.e., Cassiar Gold and Mammoth Resources go up and down completely randomly.

Pair Corralation between Cassiar Gold and Mammoth Resources

Assuming the 90 days trading horizon Cassiar Gold Corp is expected to under-perform the Mammoth Resources. But the stock apears to be less risky and, when comparing its historical volatility, Cassiar Gold Corp is 3.5 times less risky than Mammoth Resources. The stock trades about -0.02 of its potential returns per unit of risk. The Mammoth Resources Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Mammoth Resources Corp on October 21, 2024 and sell it today you would earn a total of  0.00  from holding Mammoth Resources Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.65%
Values	Daily Returns

Cassiar Gold Corp  vs.  Mammoth Resources Corp

Cassiar Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cassiar 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 fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Mammoth Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mammoth Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Cassiar Gold and Mammoth Resources

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

The idea behind Cassiar Gold Corp and Mammoth Resources 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.