Correlation Between Puma Exploration and Gold

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

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

Diversification Opportunities for Puma Exploration and Gold

-0.28

Correlation Coefficient

Puma Exploration  Gold

Very good diversification

The 3 months correlation between Puma and Gold is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and Gold And Gemstone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold And Gemstone and Puma Exploration 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 Puma Exploration are associated (or correlated) with Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold And Gemstone has no effect on the direction of Puma Exploration i.e., Puma Exploration and Gold go up and down completely randomly.

Pair Corralation between Puma Exploration and Gold

Assuming the 90 days horizon Puma Exploration is expected to under-perform the Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Puma Exploration is 1.67 times less risky than Gold. The otc stock trades about -0.04 of its potential returns per unit of risk. The Gold And Gemstone is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.05  in Gold And Gemstone on September 27, 2024 and sell it today you would earn a total of  0.03  from holding Gold And Gemstone or generate 60.0% return on investment over 90 days.

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

Puma Exploration  vs.  Gold And Gemstone

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.

Gold And Gemstone

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gold And Gemstone are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Puma Exploration and Gold

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

The idea behind Puma Exploration and Gold And Gemstone 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.