Correlation Between Leviathan Gold and Revival Gold

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

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

Diversification Opportunities for Leviathan Gold and Revival Gold

0.76

Correlation Coefficient

Leviathan Gold  Revival Gold

Poor diversification

The 3 months correlation between Leviathan and Revival is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Leviathan Gold and Revival Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revival Gold and Leviathan 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 Leviathan Gold are associated (or correlated) with Revival Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revival Gold has no effect on the direction of Leviathan Gold i.e., Leviathan Gold and Revival Gold go up and down completely randomly.

Pair Corralation between Leviathan Gold and Revival Gold

Assuming the 90 days horizon Leviathan Gold is expected to generate 2.63 times more return on investment than Revival Gold. However, Leviathan Gold is 2.63 times more volatile than Revival Gold. It trades about 0.19 of its potential returns per unit of risk. Revival Gold is currently generating about 0.16 per unit of risk. If you would invest  3.46  in Leviathan Gold on December 28, 2024 and sell it today you would earn a total of  7.54  from holding Leviathan Gold or generate 217.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

Leviathan Gold  vs.  Revival Gold

Leviathan Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Leviathan Gold are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Leviathan Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Revival Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Revival Gold are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Revival Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Leviathan Gold and Revival Gold

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

The idea behind Leviathan Gold and Revival 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.