Correlation Between Botnia Exploration and Arctic Gold

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

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

Diversification Opportunities for Botnia Exploration and Arctic Gold

0.58

Correlation Coefficient

Botnia Exploration  Arctic Gold

Very weak diversification

The 3 months correlation between Botnia and Arctic is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Botnia Exploration Holding and Arctic Gold Publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Gold Publ and Botnia Exploration 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 Botnia Exploration Holding are associated (or correlated) with Arctic Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Gold Publ has no effect on the direction of Botnia Exploration i.e., Botnia Exploration and Arctic Gold go up and down completely randomly.

Pair Corralation between Botnia Exploration and Arctic Gold

Assuming the 90 days trading horizon Botnia Exploration Holding is expected to generate 0.27 times more return on investment than Arctic Gold. However, Botnia Exploration Holding is 3.75 times less risky than Arctic Gold. It trades about -0.07 of its potential returns per unit of risk. Arctic Gold Publ is currently generating about -0.07 per unit of risk. If you would invest  1,295  in Botnia Exploration Holding on April 24, 2025 and sell it today you would lose (115.00) from holding Botnia Exploration Holding or give up 8.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Botnia Exploration Holding  vs.  Arctic Gold Publ

Botnia Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Botnia Exploration Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Arctic Gold Publ

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arctic Gold Publ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Botnia Exploration and Arctic Gold

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

The idea behind Botnia Exploration Holding and Arctic Gold Publ 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.