Correlation Between Silver Grail and Klondike Gold

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

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

Diversification Opportunities for Silver Grail and Klondike Gold

0.15

Correlation Coefficient

Silver Grail  Klondike Gold

Average diversification

The 3 months correlation between Silver and Klondike is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Silver Grail Resources and Klondike Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Gold Corp and Silver Grail 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 Silver Grail Resources are associated (or correlated) with Klondike Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Gold Corp has no effect on the direction of Silver Grail i.e., Silver Grail and Klondike Gold go up and down completely randomly.

Pair Corralation between Silver Grail and Klondike Gold

Assuming the 90 days horizon Silver Grail is expected to generate 7.98 times less return on investment than Klondike Gold. In addition to that, Silver Grail is 1.03 times more volatile than Klondike Gold Corp. It trades about 0.02 of its total potential returns per unit of risk. Klondike Gold Corp is currently generating about 0.13 per unit of volatility. If you would invest  6.00  in Klondike Gold Corp on December 20, 2024 and sell it today you would earn a total of  3.00  from holding Klondike Gold Corp or generate 50.0% return on investment over 90 days.

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

Silver Grail Resources  vs.  Klondike Gold Corp

Silver Grail Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Grail Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Silver Grail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Klondike Gold Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Klondike Gold Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Klondike Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silver Grail and Klondike Gold

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

The idea behind Silver Grail Resources and Klondike 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.