Correlation Between Viva Gold and Blue Star
Can any of the company-specific risk be diversified away by investing in both Viva Gold and Blue Star 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 Viva Gold and Blue Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viva Gold Corp and Blue Star Gold, you can compare the effects of market volatilities on Viva Gold and Blue Star 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 Viva Gold with a short position of Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viva Gold and Blue Star.
Diversification Opportunities for Viva Gold and Blue Star
Very weak diversification
The 3 months correlation between Viva and Blue is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Viva Gold Corp and Blue Star Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Star Gold and Viva 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 Viva Gold Corp are associated (or correlated) with Blue Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Star Gold has no effect on the direction of Viva Gold i.e., Viva Gold and Blue Star go up and down completely randomly.
Pair Corralation between Viva Gold and Blue Star
Assuming the 90 days horizon Viva Gold Corp is expected to generate 1.25 times more return on investment than Blue Star. However, Viva Gold is 1.25 times more volatile than Blue Star Gold. It trades about -0.07 of its potential returns per unit of risk. Blue Star Gold is currently generating about -0.1 per unit of risk. If you would invest 17.00 in Viva Gold Corp on October 7, 2024 and sell it today you would lose (7.00) from holding Viva Gold Corp or give up 41.18% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Viva Gold Corp vs. Blue Star Gold
Performance |
Timeline |
Viva Gold Corp |
Blue Star Gold |
Viva Gold and Blue Star Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Viva Gold and Blue Star
The main advantage of trading using opposite Viva Gold and Blue Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viva Gold position performs unexpectedly, Blue Star 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 Blue Star will offset losses from the drop in Blue Star's long position.Viva Gold vs. Newmont Goldcorp Corp | Viva Gold vs. Zijin Mining Group | Viva Gold vs. Zijin Mining Group | Viva Gold vs. Agnico Eagle Mines |
Blue Star vs. Newmont Goldcorp Corp | Blue Star vs. Zijin Mining Group | Blue Star vs. Zijin Mining Group | Blue Star vs. Agnico Eagle Mines |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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