Correlation Between PLATO GOLD and Ensign

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

By analyzing existing cross correlation between PLATO GOLD CORP and The Ensign Group, you can compare the effects of market volatilities on PLATO GOLD and Ensign 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 PLATO GOLD with a short position of Ensign. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLATO GOLD and Ensign.

Diversification Opportunities for PLATO GOLD and Ensign

Pay attention - limited upside

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

Pair Corralation between PLATO GOLD and Ensign

If you would invest  0.00  in The Ensign Group on July 1, 2023 and sell it today you would earn a total of  0.00  from holding The Ensign Group or generate 0.0% return on investment over 90 days.

PLATO GOLD CORP  vs.  The Ensign Group

PLATO GOLD CORP

PLATO Performance

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

Ensign Group

Ensign Performance

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Compared to the overall equity markets, risk-adjusted returns on investments in The Ensign Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Ensign is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PLATO GOLD and Ensign

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

The idea behind PLATO GOLD CORP and The Ensign Group 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.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.