Correlation Between Austral Gold and Silver Grail
Can any of the company-specific risk be diversified away by investing in both Austral Gold and Silver Grail 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 Silver Grail 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 Silver Grail Resources, you can compare the effects of market volatilities on Austral Gold and Silver Grail 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 Silver Grail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austral Gold and Silver Grail.
Diversification Opportunities for Austral Gold and Silver Grail
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Austral and Silver is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Austral Gold Limited and Silver Grail Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Grail Resources 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 Silver Grail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Grail Resources has no effect on the direction of Austral Gold i.e., Austral Gold and Silver Grail go up and down completely randomly.
Pair Corralation between Austral Gold and Silver Grail
Assuming the 90 days horizon Austral Gold Limited is expected to generate 0.93 times more return on investment than Silver Grail. However, Austral Gold Limited is 1.08 times less risky than Silver Grail. It trades about 0.18 of its potential returns per unit of risk. Silver Grail Resources is currently generating about 0.15 per unit of risk. If you would invest 1.75 in Austral Gold Limited on September 1, 2024 and sell it today you would earn a total of 0.31 from holding Austral Gold Limited or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Austral Gold Limited vs. Silver Grail Resources
Performance |
| Timeline |
| Austral Gold Limited |
| Silver Grail Resources |
Austral Gold and Silver Grail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austral Gold and Silver Grail
The main advantage of trading using opposite Austral Gold and Silver Grail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austral Gold position performs unexpectedly, Silver Grail 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 Silver Grail will offset losses from the drop in Silver Grail's long position.| Austral Gold vs. Gold79 Mines | Austral Gold vs. Arctic Star Exploration | Austral Gold vs. American Clean Resources | Austral Gold vs. Arras Minerals Corp |
| Silver Grail vs. Defiance Silver Corp | Silver Grail vs. HUMANA INC | Silver Grail vs. SCOR PK | Silver Grail vs. Aquagold International |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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