Correlation Between K92 Mining and Independence Gold

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

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

Diversification Opportunities for K92 Mining and Independence Gold

0.29

Correlation Coefficient

K92 Mining  Independence Gold

Modest diversification

The 3 months correlation between K92 and Independence is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding K92 Mining and Independence Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Gold Corp and K92 Mining 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 K92 Mining are associated (or correlated) with Independence Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Gold Corp has no effect on the direction of K92 Mining i.e., K92 Mining and Independence Gold go up and down completely randomly.

Pair Corralation between K92 Mining and Independence Gold

Assuming the 90 days horizon K92 Mining is expected to generate 26.67 times less return on investment than Independence Gold. But when comparing it to its historical volatility, K92 Mining is 14.48 times less risky than Independence Gold. It trades about 0.02 of its potential returns per unit of risk. Independence Gold Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Independence Gold Corp on September 14, 2024 and sell it today you would earn a total of  6.00  from holding Independence Gold Corp or generate 54.55% return on investment over 90 days.

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

K92 Mining  vs.  Independence Gold Corp

K92 Mining

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in K92 Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, K92 Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Independence Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Independence Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Independence Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with K92 Mining and Independence Gold

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

The idea behind K92 Mining and Independence 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.

Check out your portfolio center.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.