Correlation Between GCM Mining and Caldas Gold

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

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

Diversification Opportunities for GCM Mining and Caldas Gold

0.0

Correlation Coefficient

GCM Mining  Caldas Gold

Pay attention - limited upside

The 3 months correlation between GCM and Caldas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GCM Mining Corp and Caldas Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldas Gold and GCM Mining 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 GCM Mining Corp are associated (or correlated) with Caldas Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldas Gold has no effect on the direction of GCM Mining i.e., GCM Mining and Caldas Gold go up and down completely randomly.

Pair Corralation between GCM Mining and Caldas Gold

If you would invest  18.00  in Caldas Gold on October 23, 2024 and sell it today you would earn a total of  0.00  from holding Caldas Gold or generate 0.0% return on investment over 90 days.

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

GCM Mining Corp  vs.  Caldas Gold

GCM Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GCM Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, GCM Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Caldas Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Caldas Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Caldas Gold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GCM Mining and Caldas Gold

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

The idea behind GCM Mining Corp and Caldas Gold 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.