Correlation Between Pace Metals and Prosper Gold

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

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

Diversification Opportunities for Pace Metals and Prosper Gold

0.0

Correlation Coefficient

Pace Metals  Prosper Gold

Pay attention - limited upside

The 3 months correlation between Pace and Prosper is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pace Metals and Prosper Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosper Gold Corp and Pace Metals 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 Pace Metals are associated (or correlated) with Prosper Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosper Gold Corp has no effect on the direction of Pace Metals i.e., Pace Metals and Prosper Gold go up and down completely randomly.

Pair Corralation between Pace Metals and Prosper Gold

If you would invest  8.00  in Prosper Gold Corp on December 20, 2024 and sell it today you would earn a total of  1.50  from holding Prosper Gold Corp or generate 18.75% return on investment over 90 days.

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

Pace Metals  vs.  Prosper Gold Corp

Pace Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pace Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Pace Metals is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Prosper Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Prosper Gold Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Prosper Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pace Metals and Prosper Gold

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

The idea behind Pace Metals and Prosper 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.