Correlation Between Impala Platinum and Sonoro Gold

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

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

Diversification Opportunities for Impala Platinum and Sonoro Gold

0.29

Correlation Coefficient

Impala Platinum  Sonoro Gold

Modest diversification

The 3 months correlation between Impala and Sonoro is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings and Sonoro Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonoro Gold Corp and Impala Platinum 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 Impala Platinum Holdings are associated (or correlated) with Sonoro Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonoro Gold Corp has no effect on the direction of Impala Platinum i.e., Impala Platinum and Sonoro Gold go up and down completely randomly.

Pair Corralation between Impala Platinum and Sonoro Gold

Assuming the 90 days horizon Impala Platinum Holdings is expected to under-perform the Sonoro Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Impala Platinum Holdings is 2.65 times less risky than Sonoro Gold. The otc stock trades about -0.11 of its potential returns per unit of risk. The Sonoro Gold Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  5.86  in Sonoro Gold Corp on December 2, 2024 and sell it today you would earn a total of  0.76  from holding Sonoro Gold Corp or generate 12.97% return on investment over 90 days.

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

Impala Platinum Holdings  vs.  Sonoro Gold Corp

Impala Platinum Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Impala Platinum Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sonoro Gold Corp

Risk-Adjusted Performance

Weak

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

Pair Trading with Impala Platinum and Sonoro Gold

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

The idea behind Impala Platinum Holdings and Sonoro 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 Transaction History module to view history of all your transactions and understand their impact on performance.