Correlation Between Ampleforth and Big Ridge
Can any of the company-specific risk be diversified away by investing in both Ampleforth and Big Ridge 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 Ampleforth and Big Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampleforth and Big Ridge Gold, you can compare the effects of market volatilities on Ampleforth and Big Ridge 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 Ampleforth with a short position of Big Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampleforth and Big Ridge.
Diversification Opportunities for Ampleforth and Big Ridge
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ampleforth and Big is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ampleforth and Big Ridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Ridge Gold and Ampleforth 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 Ampleforth are associated (or correlated) with Big Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Ridge Gold has no effect on the direction of Ampleforth i.e., Ampleforth and Big Ridge go up and down completely randomly.
Pair Corralation between Ampleforth and Big Ridge
Assuming the 90 days trading horizon Ampleforth is expected to generate 1.72 times more return on investment than Big Ridge. However, Ampleforth is 1.72 times more volatile than Big Ridge Gold. It trades about 0.12 of its potential returns per unit of risk. Big Ridge Gold is currently generating about 0.04 per unit of risk. If you would invest 115.00 in Ampleforth on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Ampleforth or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ampleforth vs. Big Ridge Gold
Performance |
| Timeline |
| Ampleforth |
| Big Ridge Gold |
Ampleforth and Big Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampleforth and Big Ridge
The main advantage of trading using opposite Ampleforth and Big Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampleforth position performs unexpectedly, Big Ridge 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 Big Ridge will offset losses from the drop in Big Ridge's long position.The idea behind Ampleforth and Big Ridge Gold 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.| Big Ridge vs. Minnova Corp | Big Ridge vs. Argo Gold | Big Ridge vs. Advance Gold Corp | Big Ridge vs. Blue Star Gold |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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