Correlation Between Camino Minerals and Bravada Gold

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

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

Diversification Opportunities for Camino Minerals and Bravada Gold

0.63

Correlation Coefficient

Camino Minerals  Bravada Gold

Poor diversification

The 3 months correlation between Camino and Bravada is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Camino Minerals and Bravada Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bravada Gold and Camino Minerals 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 Camino Minerals are associated (or correlated) with Bravada Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bravada Gold has no effect on the direction of Camino Minerals i.e., Camino Minerals and Bravada Gold go up and down completely randomly.

Pair Corralation between Camino Minerals and Bravada Gold

Assuming the 90 days horizon Camino Minerals is expected to under-perform the Bravada Gold. But the stock apears to be less risky and, when comparing its historical volatility, Camino Minerals is 3.1 times less risky than Bravada Gold. The stock trades about -0.22 of its potential returns per unit of risk. The Bravada Gold is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Bravada Gold on September 5, 2024 and sell it today you would lose (0.50) from holding Bravada Gold or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.62%
Values	Daily Returns

Camino Minerals  vs.  Bravada Gold

Camino Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camino Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Bravada Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bravada Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Camino Minerals and Bravada Gold

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

The idea behind Camino Minerals and Bravada 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.