Correlation Between Maple Gold and White Gold

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

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

Diversification Opportunities for Maple Gold and White Gold

0.02

Correlation Coefficient

Maple Gold  White Gold

Significant diversification

The 3 months correlation between Maple and White is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Maple Gold Mines and White Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Gold Corp and Maple 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 Maple Gold Mines are associated (or correlated) with White Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Gold Corp has no effect on the direction of Maple Gold i.e., Maple Gold and White Gold go up and down completely randomly.

Pair Corralation between Maple Gold and White Gold

Assuming the 90 days horizon Maple Gold Mines is expected to generate 1.56 times more return on investment than White Gold. However, Maple Gold is 1.56 times more volatile than White Gold Corp. It trades about 0.06 of its potential returns per unit of risk. White Gold Corp is currently generating about 0.04 per unit of risk. If you would invest  5.00  in Maple Gold Mines on December 28, 2024 and sell it today you would earn a total of  0.50  from holding Maple Gold Mines or generate 10.0% return on investment over 90 days.

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

Maple Gold Mines  vs.  White Gold Corp

Maple Gold Mines

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maple Gold Mines are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Maple Gold showed solid returns over the last few months and may actually be approaching a breakup point.

White Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in White Gold Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, White Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Maple Gold and White Gold

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

The idea behind Maple Gold Mines and White 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.