Correlation Between Mountain Province and Golden Minerals

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

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

Diversification Opportunities for Mountain Province and Golden Minerals

-0.34

Correlation Coefficient

Mountain Province  Golden Minerals

Very good diversification

The 3 months correlation between Mountain and Golden is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Province Diamonds and Golden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Minerals and Mountain Province 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 Mountain Province Diamonds are associated (or correlated) with Golden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Minerals has no effect on the direction of Mountain Province i.e., Mountain Province and Golden Minerals go up and down completely randomly.

Pair Corralation between Mountain Province and Golden Minerals

If you would invest  35.00  in Mountain Province Diamonds on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Mountain Province Diamonds or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.37%
Values	Daily Returns

Mountain Province Diamonds  vs.  Golden Minerals

Mountain Province

Risk-Adjusted Performance

0 of 100

Very Weak

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

Golden Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Mountain Province and Golden Minerals

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

The idea behind Mountain Province Diamonds and Golden Minerals 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.