Correlation Between MAS Gold and Stakeholder Gold

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Can any of the company-specific risk be diversified away by investing in both MAS Gold and Stakeholder 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 MAS Gold and Stakeholder Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAS Gold Corp and Stakeholder Gold Corp, you can compare the effects of market volatilities on MAS Gold and Stakeholder 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 MAS Gold with a short position of Stakeholder Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAS Gold and Stakeholder Gold.

Diversification Opportunities for MAS Gold and Stakeholder Gold

MASStakeholderDiversified AwayMASStakeholderDiversified Away100%
-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between MAS and Stakeholder is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MAS Gold Corp and Stakeholder Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stakeholder Gold Corp and MAS 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 MAS Gold Corp are associated (or correlated) with Stakeholder Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stakeholder Gold Corp has no effect on the direction of MAS Gold i.e., MAS Gold and Stakeholder Gold go up and down completely randomly.

Pair Corralation between MAS Gold and Stakeholder Gold

Assuming the 90 days horizon MAS Gold Corp is expected to generate 8.24 times more return on investment than Stakeholder Gold. However, MAS Gold is 8.24 times more volatile than Stakeholder Gold Corp. It trades about 0.15 of its potential returns per unit of risk. Stakeholder Gold Corp is currently generating about -0.02 per unit of risk. If you would invest  1.00  in MAS Gold Corp on October 15, 2024 and sell it today you would earn a total of  0.00  from holding MAS Gold Corp or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

MAS Gold Corp  vs.  Stakeholder Gold Corp

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50-40-30-20-1001020
JavaScript chart by amCharts 3.21.15MAS SRC
       Timeline  
MAS Gold Corp 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in MAS Gold Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, MAS Gold showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.010.0120.0140.0160.0180.02
Stakeholder Gold Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Stakeholder Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Stakeholder Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.90.9511.051.1

MAS Gold and Stakeholder Gold Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-114.05-85.42-56.79-28.150.029.4459.8990.34120.79151.24 0.0050.0100.015
JavaScript chart by amCharts 3.21.15MAS SRC
       Returns  

Pair Trading with MAS Gold and Stakeholder Gold

The main advantage of trading using opposite MAS Gold and Stakeholder Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAS Gold position performs unexpectedly, Stakeholder 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 Stakeholder Gold will offset losses from the drop in Stakeholder Gold's long position.
The idea behind MAS Gold Corp and Stakeholder 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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