Correlation Between Sarama Resources and Maple Gold

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

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

Diversification Opportunities for Sarama Resources and Maple Gold

-0.4

Correlation Coefficient

Sarama Resources  Maple Gold

Very good diversification

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

Pair Corralation between Sarama Resources and Maple Gold

Assuming the 90 days horizon Sarama Resources is expected to generate 14.32 times more return on investment than Maple Gold. However, Sarama Resources is 14.32 times more volatile than Maple Gold Mines. It trades about 0.15 of its potential returns per unit of risk. Maple Gold Mines is currently generating about -0.03 per unit of risk. If you would invest  0.16  in Sarama Resources on May 5, 2025 and sell it today you would earn a total of  2.84  from holding Sarama Resources or generate 1775.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

Sarama Resources  vs.  Maple Gold Mines

Sarama Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sarama Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting primary indicators, Sarama Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Maple Gold Mines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maple Gold Mines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Sarama Resources and Maple Gold

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

The idea behind Sarama Resources and Maple Gold Mines 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.