Correlation Between Kodiak Copper and P2 Gold

Can any of the company-specific risk be diversified away by investing in both Kodiak Copper and P2 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 Kodiak Copper and P2 Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kodiak Copper Corp and P2 Gold, you can compare the effects of market volatilities on Kodiak Copper and P2 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 Kodiak Copper with a short position of P2 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kodiak Copper and P2 Gold.

Diversification Opportunities for Kodiak Copper and P2 Gold

0.53

Correlation Coefficient

Kodiak Copper  P2 Gold

Very weak diversification

The 3 months correlation between Kodiak and PGLDF is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Copper Corp and P2 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on P2 Gold and Kodiak Copper 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 Kodiak Copper Corp are associated (or correlated) with P2 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of P2 Gold has no effect on the direction of Kodiak Copper i.e., Kodiak Copper and P2 Gold go up and down completely randomly.

Pair Corralation between Kodiak Copper and P2 Gold

Assuming the 90 days horizon Kodiak Copper Corp is expected to under-perform the P2 Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Kodiak Copper Corp is 2.32 times less risky than P2 Gold. The otc stock trades about -0.07 of its potential returns per unit of risk. The P2 Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4.37  in P2 Gold on September 13, 2024 and sell it today you would earn a total of  0.18  from holding P2 Gold or generate 4.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Kodiak Copper Corp  vs.  P2 Gold

Kodiak Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kodiak Copper Corp 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 fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

P2 Gold

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in P2 Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, P2 Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kodiak Copper and P2 Gold

The main advantage of trading using opposite Kodiak Copper and P2 Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kodiak Copper position performs unexpectedly, P2 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 P2 Gold will offset losses from the drop in P2 Gold's long position.

The idea behind Kodiak Copper Corp and P2 Gold 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.