Correlation Between Cassiar Gold and Pacific Ridge

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

Diversification Opportunities for Cassiar Gold and Pacific Ridge

0.55

Correlation Coefficient

Cassiar Gold  Pacific Ridge

Very weak diversification

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

Pair Corralation between Cassiar Gold and Pacific Ridge

If you would invest  19.00  in Cassiar Gold Corp on October 27, 2024 and sell it today you would earn a total of  1.00  from holding Cassiar Gold Corp or generate 5.26% return on investment over 90 days.

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

Cassiar Gold Corp  vs.  Pacific Ridge Exploration

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 latest unfluctuating performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pacific Ridge Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacific Ridge Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Cassiar Gold and Pacific Ridge

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

The idea behind Cassiar Gold Corp and Pacific Ridge Exploration 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.