Correlation Between Mexus Gold and Puma Exploration

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

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

Diversification Opportunities for Mexus Gold and Puma Exploration

0.1

Correlation Coefficient

Mexus Gold  Puma Exploration

Average diversification

The 3 months correlation between Mexus and Puma is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mexus Gold Us and Puma Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Exploration and Mexus 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 Mexus Gold Us are associated (or correlated) with Puma Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Exploration has no effect on the direction of Mexus Gold i.e., Mexus Gold and Puma Exploration go up and down completely randomly.

Pair Corralation between Mexus Gold and Puma Exploration

Given the investment horizon of 90 days Mexus Gold Us is expected to generate 8.37 times more return on investment than Puma Exploration. However, Mexus Gold is 8.37 times more volatile than Puma Exploration. It trades about 0.06 of its potential returns per unit of risk. Puma Exploration is currently generating about 0.0 per unit of risk. If you would invest  0.01  in Mexus Gold Us on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Mexus Gold Us or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Mexus Gold Us  vs.  Puma Exploration

Mexus Gold Us

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mexus Gold Us are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mexus Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Puma Exploration

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Puma Exploration are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Puma Exploration reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mexus Gold and Puma Exploration

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

The idea behind Mexus Gold Us and Puma Exploration 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 Commodity Directory module to find actively traded commodities issued by global exchanges.