Correlation Between Sitka Gold and Certara

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

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

Diversification Opportunities for Sitka Gold and Certara

0.6

Correlation Coefficient

Sitka Gold  Certara

Poor diversification

The 3 months correlation between Sitka and Certara is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sitka Gold Corp and Certara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Certara and Sitka 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 Sitka Gold Corp are associated (or correlated) with Certara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Certara has no effect on the direction of Sitka Gold i.e., Sitka Gold and Certara go up and down completely randomly.

Pair Corralation between Sitka Gold and Certara

Assuming the 90 days horizon Sitka Gold Corp is expected to generate 1.54 times more return on investment than Certara. However, Sitka Gold is 1.54 times more volatile than Certara. It trades about 0.04 of its potential returns per unit of risk. Certara is currently generating about 0.01 per unit of risk. If you would invest  36.00  in Sitka Gold Corp on March 20, 2025 and sell it today you would earn a total of  4.00  from holding Sitka Gold Corp or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.39%
Values	Daily Returns

Sitka Gold Corp  vs.  Certara

Sitka Gold Corp

Risk-Adjusted Performance

Modest

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

Certara

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Certara are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Certara is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sitka Gold and Certara

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

The idea behind Sitka Gold Corp and Certara 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.