Correlation Between VVC Exploration and Plato Gold

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

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

Diversification Opportunities for VVC Exploration and Plato Gold

0.11

Correlation Coefficient

VVC Exploration  Plato Gold

Average diversification

The 3 months correlation between VVC and Plato is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding VVC Exploration Corp and Plato Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plato Gold Corp and VVC 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 VVC Exploration Corp are associated (or correlated) with Plato Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plato Gold Corp has no effect on the direction of VVC Exploration i.e., VVC Exploration and Plato Gold go up and down completely randomly.

Pair Corralation between VVC Exploration and Plato Gold

Assuming the 90 days horizon VVC Exploration Corp is expected to generate 1.68 times more return on investment than Plato Gold. However, VVC Exploration is 1.68 times more volatile than Plato Gold Corp. It trades about 0.02 of its potential returns per unit of risk. Plato Gold Corp is currently generating about -0.02 per unit of risk. If you would invest  3.00  in VVC Exploration Corp on April 23, 2025 and sell it today you would lose (1.00) from holding VVC Exploration Corp or give up 33.33% of portfolio value over 90 days.

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

VVC Exploration Corp  vs.  Plato Gold Corp

VVC Exploration Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VVC Exploration Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, VVC Exploration showed solid returns over the last few months and may actually be approaching a breakup point.

Plato Gold Corp

Risk-Adjusted Performance

Insignificant

Over the last 90 days Plato Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with VVC Exploration and Plato Gold

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

The idea behind VVC Exploration Corp and Plato Gold Corp 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.