Correlation Between Sitka Gold and Vanguard Global

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Can any of the company-specific risk be diversified away by investing in both Sitka Gold and Vanguard Global 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 Sitka Gold and Vanguard Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitka Gold Corp and Vanguard Global Minimum, you can compare the effects of market volatilities on Sitka Gold and Vanguard Global 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 Sitka Gold with a short position of Vanguard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitka Gold and Vanguard Global.

Diversification Opportunities for Sitka Gold and Vanguard Global

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Sitka and Vanguard is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sitka Gold Corp and Vanguard Global Minimum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Global Minimum and Sitka 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 Sitka Gold Corp are associated (or correlated) with Vanguard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Global Minimum has no effect on the direction of Sitka Gold i.e., Sitka Gold and Vanguard Global go up and down completely randomly.

Pair Corralation between Sitka Gold and Vanguard Global

Assuming the 90 days horizon Sitka Gold Corp is expected to generate 16.21 times more return on investment than Vanguard Global. However, Sitka Gold is 16.21 times more volatile than Vanguard Global Minimum. It trades about 0.0 of its potential returns per unit of risk. Vanguard Global Minimum is currently generating about -0.03 per unit of risk. If you would invest  28.00  in Sitka Gold Corp on September 10, 2024 and sell it today you would lose (1.00) from holding Sitka Gold Corp or give up 3.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Sitka Gold Corp  vs.  Vanguard Global Minimum

 Performance 
       Timeline  
Sitka Gold Corp 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Sitka Gold Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Sitka Gold reported solid returns over the last few months and may actually be approaching a breakup point.
Vanguard Global Minimum 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Global Minimum are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Vanguard Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sitka Gold and Vanguard Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sitka Gold and Vanguard Global

The main advantage of trading using opposite Sitka Gold and Vanguard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitka Gold position performs unexpectedly, Vanguard Global 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 Vanguard Global will offset losses from the drop in Vanguard Global's long position.
The idea behind Sitka Gold Corp and Vanguard Global Minimum 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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