Correlation Between Bald Eagle and P2 Gold

Can any of the company-specific risk be diversified away by investing in both Bald Eagle and P2 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 Bald Eagle and P2 Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bald Eagle Gold and P2 Gold, you can compare the effects of market volatilities on Bald Eagle and P2 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 Bald Eagle with a short position of P2 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bald Eagle and P2 Gold.

Diversification Opportunities for Bald Eagle and P2 Gold

0.4

Correlation Coefficient

Bald Eagle  P2 Gold

Very weak diversification

The 3 months correlation between Bald and PGLDF is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bald Eagle Gold and P2 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on P2 Gold and Bald Eagle 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 Bald Eagle Gold are associated (or correlated) with P2 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of P2 Gold has no effect on the direction of Bald Eagle i.e., Bald Eagle and P2 Gold go up and down completely randomly.

Pair Corralation between Bald Eagle and P2 Gold

Assuming the 90 days horizon Bald Eagle is expected to generate 2.43 times less return on investment than P2 Gold. But when comparing it to its historical volatility, Bald Eagle Gold is 1.53 times less risky than P2 Gold. It trades about 0.08 of its potential returns per unit of risk. P2 Gold is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6.30  in P2 Gold on May 4, 2025 and sell it today you would earn a total of  3.40  from holding P2 Gold or generate 53.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bald Eagle Gold  vs.  P2 Gold

Bald Eagle Gold

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bald Eagle Gold are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Bald Eagle reported solid returns over the last few months and may actually be approaching a breakup point.

P2 Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in P2 Gold are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, P2 Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bald Eagle and P2 Gold

The main advantage of trading using opposite Bald Eagle and P2 Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bald Eagle position performs unexpectedly, P2 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 P2 Gold will offset losses from the drop in P2 Gold's long position.

The idea behind Bald Eagle Gold and P2 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.