Correlation Between Serabi Gold and Sulliden Minerals

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

By analyzing existing cross correlation between Serabi Gold PLC and Sulliden Minerals SA, you can compare the effects of market volatilities on Serabi Gold and Sulliden 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 Serabi Gold with a short position of Sulliden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Serabi Gold and Sulliden Minerals.

Diversification Opportunities for Serabi Gold and Sulliden Minerals

0.08

Correlation Coefficient

Serabi Gold  Sulliden Minerals

Significant diversification

The 3 months correlation between Serabi and Sulliden is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Serabi Gold PLC and Sulliden Minerals SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulliden Minerals and Serabi 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 Serabi Gold PLC are associated (or correlated) with Sulliden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulliden Minerals has no effect on the direction of Serabi Gold i.e., Serabi Gold and Sulliden Minerals go up and down completely randomly.

Pair Corralation between Serabi Gold and Sulliden Minerals

Assuming the 90 days trading horizon Serabi Gold PLC is expected to generate 0.47 times more return on investment than Sulliden Minerals. However, Serabi Gold PLC is 2.14 times less risky than Sulliden Minerals. It trades about 0.12 of its potential returns per unit of risk. Sulliden Minerals SA is currently generating about 0.05 per unit of risk. If you would invest  129.00  in Serabi Gold PLC on September 1, 2024 and sell it today you would earn a total of  49.00  from holding Serabi Gold PLC or generate 37.98% return on investment over 90 days.

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

Serabi Gold PLC  vs.  Sulliden Minerals SA

Serabi Gold PLC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Serabi Gold PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal forward indicators, Serabi Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Sulliden Minerals

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Serabi Gold and Sulliden Minerals

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

The idea behind Serabi Gold PLC and Sulliden Minerals SA 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.