Correlation Between Austral Gold and Southern Silver
Can any of the company-specific risk be diversified away by investing in both Austral Gold and Southern Silver 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 Southern Silver 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 Southern Silver Exploration, you can compare the effects of market volatilities on Austral Gold and Southern Silver 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 Southern Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austral Gold and Southern Silver.
Diversification Opportunities for Austral Gold and Southern Silver
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Austral and Southern is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Austral Gold Limited and Southern Silver Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Silver Expl 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 Southern Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Silver Expl has no effect on the direction of Austral Gold i.e., Austral Gold and Southern Silver go up and down completely randomly.
Pair Corralation between Austral Gold and Southern Silver
Assuming the 90 days horizon Austral Gold Limited is expected to generate 4.19 times more return on investment than Southern Silver. However, Austral Gold is 4.19 times more volatile than Southern Silver Exploration. It trades about 0.09 of its potential returns per unit of risk. Southern Silver Exploration is currently generating about 0.02 per unit of risk. If you would invest 3.12 in Austral Gold Limited on August 31, 2024 and sell it today you would lose (1.06) from holding Austral Gold Limited or give up 33.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austral Gold Limited vs. Southern Silver Exploration
Performance |
| Timeline |
| Austral Gold Limited |
| Southern Silver Expl |
Austral Gold and Southern Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austral Gold and Southern Silver
The main advantage of trading using opposite Austral Gold and Southern Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austral Gold position performs unexpectedly, Southern Silver 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 Southern Silver will offset losses from the drop in Southern Silver's long position.| Austral Gold vs. Scottie Resources Corp | Austral Gold vs. Defiance Silver Corp | Austral Gold vs. HUMANA INC | Austral Gold vs. SCOR PK |
| Southern Silver vs. Scottie Resources Corp | Southern Silver vs. Defiance Silver Corp | Southern Silver vs. HUMANA INC | Southern Silver vs. SCOR PK |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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