Correlation Between K2 Gold and Baselode Energy
Can any of the company-specific risk be diversified away by investing in both K2 Gold and Baselode Energy 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 K2 Gold and Baselode Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K2 Gold and Baselode Energy Corp, you can compare the effects of market volatilities on K2 Gold and Baselode Energy 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 K2 Gold with a short position of Baselode Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Gold and Baselode Energy.
Diversification Opportunities for K2 Gold and Baselode Energy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between KTO and Baselode is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding K2 Gold and Baselode Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baselode Energy Corp and K2 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 K2 Gold are associated (or correlated) with Baselode Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baselode Energy Corp has no effect on the direction of K2 Gold i.e., K2 Gold and Baselode Energy go up and down completely randomly.
Pair Corralation between K2 Gold and Baselode Energy
Assuming the 90 days horizon K2 Gold is expected to generate 0.74 times more return on investment than Baselode Energy. However, K2 Gold is 1.35 times less risky than Baselode Energy. It trades about 0.19 of its potential returns per unit of risk. Baselode Energy Corp is currently generating about 0.11 per unit of risk. If you would invest 12.00 in K2 Gold on December 28, 2024 and sell it today you would earn a total of 8.00 from holding K2 Gold or generate 66.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
K2 Gold vs. Baselode Energy Corp
Performance |
Timeline |
K2 Gold |
Baselode Energy Corp |
K2 Gold and Baselode Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with K2 Gold and Baselode Energy
The main advantage of trading using opposite K2 Gold and Baselode Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Gold position performs unexpectedly, Baselode Energy 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 Baselode Energy will offset losses from the drop in Baselode Energy's long position.The idea behind K2 Gold and Baselode Energy 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.Baselode Energy vs. Aya Gold Silver | Baselode Energy vs. Plaza Retail REIT | Baselode Energy vs. Cogeco Communications | Baselode Energy vs. Advent Wireless |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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