Correlation Between Royal Gold and SSR Mining
Can any of the company-specific risk be diversified away by investing in both Royal Gold and SSR Mining 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 Royal Gold and SSR Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Gold and SSR Mining, you can compare the effects of market volatilities on Royal Gold and SSR Mining 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 Royal Gold with a short position of SSR Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Gold and SSR Mining.
Diversification Opportunities for Royal Gold and SSR Mining
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Royal and SSR is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Royal Gold and SSR Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSR Mining and Royal 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 Royal Gold are associated (or correlated) with SSR Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSR Mining has no effect on the direction of Royal Gold i.e., Royal Gold and SSR Mining go up and down completely randomly.
Pair Corralation between Royal Gold and SSR Mining
Given the investment horizon of 90 days Royal Gold is expected to under-perform the SSR Mining. But the stock apears to be less risky and, when comparing its historical volatility, Royal Gold is 2.16 times less risky than SSR Mining. The stock trades about -0.19 of its potential returns per unit of risk. The SSR Mining is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 576.00 in SSR Mining on September 24, 2024 and sell it today you would earn a total of 119.00 from holding SSR Mining or generate 20.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Royal Gold vs. SSR Mining
Performance |
Timeline |
Royal Gold |
SSR Mining |
Royal Gold and SSR Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Royal Gold and SSR Mining
The main advantage of trading using opposite Royal Gold and SSR Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Gold position performs unexpectedly, SSR Mining 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 SSR Mining will offset losses from the drop in SSR Mining's long position.Royal Gold vs. Wheaton Precious Metals | Royal Gold vs. Agnico Eagle Mines | Royal Gold vs. Sandstorm Gold Ltd | Royal Gold vs. Osisko Gold Ro |
SSR Mining vs. Centerra Gold | SSR Mining vs. Gold Fields Ltd | SSR Mining vs. Eldorado Gold Corp | SSR Mining vs. Osisko Gold Ro |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |