Correlation Between Aurion Resources and G2 Goldfields
Can any of the company-specific risk be diversified away by investing in both Aurion Resources and G2 Goldfields 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 Aurion Resources and G2 Goldfields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurion Resources and G2 Goldfields, you can compare the effects of market volatilities on Aurion Resources and G2 Goldfields 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 Aurion Resources with a short position of G2 Goldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurion Resources and G2 Goldfields.
Diversification Opportunities for Aurion Resources and G2 Goldfields
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurion and GUYGF is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aurion Resources and G2 Goldfields in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G2 Goldfields and Aurion Resources 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 Aurion Resources are associated (or correlated) with G2 Goldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G2 Goldfields has no effect on the direction of Aurion Resources i.e., Aurion Resources and G2 Goldfields go up and down completely randomly.
Pair Corralation between Aurion Resources and G2 Goldfields
Assuming the 90 days horizon Aurion Resources is expected to generate 4.81 times less return on investment than G2 Goldfields. But when comparing it to its historical volatility, Aurion Resources is 1.44 times less risky than G2 Goldfields. It trades about 0.04 of its potential returns per unit of risk. G2 Goldfields is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 111.00 in G2 Goldfields on August 31, 2024 and sell it today you would earn a total of 42.00 from holding G2 Goldfields or generate 37.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurion Resources vs. G2 Goldfields
Performance |
| Timeline |
| Aurion Resources |
| G2 Goldfields |
Aurion Resources and G2 Goldfields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurion Resources and G2 Goldfields
The main advantage of trading using opposite Aurion Resources and G2 Goldfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurion Resources position performs unexpectedly, G2 Goldfields 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 G2 Goldfields will offset losses from the drop in G2 Goldfields' long position.| Aurion Resources vs. Minnova Corp | Aurion Resources vs. Argo Gold | Aurion Resources vs. Advance Gold Corp | Aurion Resources vs. Blue Star Gold |
| G2 Goldfields vs. Marvel Gold Limited | G2 Goldfields vs. GGX Gold Corp | G2 Goldfields vs. Hummingbird Resources PLC | G2 Goldfields vs. Angkor Resources Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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