Correlation Between Arctic Star and Bravada Gold

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

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

Diversification Opportunities for Arctic Star and Bravada Gold

-0.11

Correlation Coefficient

Arctic Star  Bravada Gold

Good diversification

The 3 months correlation between Arctic and Bravada is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Star Exploration and Bravada Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bravada Gold and Arctic Star 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 Arctic Star Exploration 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 Arctic Star i.e., Arctic Star and Bravada Gold go up and down completely randomly.

Pair Corralation between Arctic Star and Bravada Gold

Assuming the 90 days horizon Arctic Star Exploration is expected to under-perform the Bravada Gold. In addition to that, Arctic Star is 1.15 times more volatile than Bravada Gold. It trades about -0.06 of its total potential returns per unit of risk. Bravada Gold is currently generating about 0.09 per unit of volatility. If you would invest  2.55  in Bravada Gold on May 6, 2025 and sell it today you would earn a total of  0.85  from holding Bravada Gold or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Arctic Star Exploration  vs.  Bravada Gold

Arctic Star Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arctic Star Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Bravada Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bravada Gold are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Bravada Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arctic Star and Bravada Gold

The main advantage of trading using opposite Arctic Star and Bravada Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Star 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 Arctic Star Exploration 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.