Correlation Between Austral Gold and Gold79 Mines
Can any of the company-specific risk be diversified away by investing in both Austral Gold and Gold79 Mines 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 Austral Gold and Gold79 Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austral Gold Limited and Gold79 Mines, you can compare the effects of market volatilities on Austral Gold and Gold79 Mines 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 Austral Gold with a short position of Gold79 Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austral Gold and Gold79 Mines.
Diversification Opportunities for Austral Gold and Gold79 Mines
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Austral and Gold79 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Austral Gold Limited and Gold79 Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold79 Mines and Austral 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 Austral Gold Limited are associated (or correlated) with Gold79 Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold79 Mines has no effect on the direction of Austral Gold i.e., Austral Gold and Gold79 Mines go up and down completely randomly.
Pair Corralation between Austral Gold and Gold79 Mines
Assuming the 90 days horizon Austral Gold Limited is expected to generate 3.08 times more return on investment than Gold79 Mines. However, Austral Gold is 3.08 times more volatile than Gold79 Mines. It trades about 0.1 of its potential returns per unit of risk. Gold79 Mines is currently generating about 0.05 per unit of risk. If you would invest 2.52 in Austral Gold Limited on August 31, 2024 and sell it today you would lose (0.46) from holding Austral Gold Limited or give up 18.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Austral Gold Limited vs. Gold79 Mines
Performance |
| Timeline |
| Austral Gold Limited |
| Gold79 Mines |
Austral Gold and Gold79 Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austral Gold and Gold79 Mines
The main advantage of trading using opposite Austral Gold and Gold79 Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austral Gold position performs unexpectedly, Gold79 Mines 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 Gold79 Mines will offset losses from the drop in Gold79 Mines' long position.| Austral Gold vs. Scottie Resources Corp | Austral Gold vs. Defiance Silver Corp | Austral Gold vs. HUMANA INC | Austral Gold vs. SCOR PK |
| Gold79 Mines vs. Arctic Star Exploration | Gold79 Mines vs. American Clean Resources | Gold79 Mines vs. Arras Minerals Corp | Gold79 Mines vs. American Creek Resources |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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