Correlation Between Royal Gold and Yamana Gold
Can any of the company-specific risk be diversified away by investing in both Royal Gold and Yamana 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 Royal Gold and Yamana Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Gold and Yamana Gold, you can compare the effects of market volatilities on Royal Gold and Yamana 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 Royal Gold with a short position of Yamana Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Gold and Yamana Gold.
Diversification Opportunities for Royal Gold and Yamana Gold
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Royal and Yamana is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Royal Gold and Yamana Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yamana Gold and Royal 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 Royal Gold are associated (or correlated) with Yamana Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yamana Gold has no effect on the direction of Royal Gold i.e., Royal Gold and Yamana Gold go up and down completely randomly.
Pair Corralation between Royal Gold and Yamana Gold
If you would invest 11,064 in Royal Gold on January 24, 2024 and sell it today you would earn a total of 818.00 from holding Royal Gold or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Royal Gold vs. Yamana Gold
Performance |
| Timeline |
| Royal Gold |
| Yamana Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Royal Gold and Yamana Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Gold and Yamana Gold
The main advantage of trading using opposite Royal Gold and Yamana Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Gold position performs unexpectedly, Yamana 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 Yamana Gold will offset losses from the drop in Yamana Gold's long position.The idea behind Royal Gold and Yamana 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.| Yamana Gold vs. Agnico Eagle Mines | Yamana Gold vs. Wheaton Precious Metals | Yamana Gold vs. Newmont Goldcorp Corp | Yamana Gold vs. Kinross Gold |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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