Correlation Between Ampleforth and Headwater Gold
Can any of the company-specific risk be diversified away by investing in both Ampleforth and Headwater Gold 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 Headwater Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampleforth and Headwater Gold, you can compare the effects of market volatilities on Ampleforth and Headwater Gold 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 Headwater Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampleforth and Headwater Gold.
Diversification Opportunities for Ampleforth and Headwater Gold
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ampleforth and Headwater is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ampleforth and Headwater Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Headwater 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 Headwater Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Headwater Gold has no effect on the direction of Ampleforth i.e., Ampleforth and Headwater Gold go up and down completely randomly.
Pair Corralation between Ampleforth and Headwater Gold
Assuming the 90 days trading horizon Ampleforth is expected to generate 0.91 times more return on investment than Headwater Gold. However, Ampleforth is 1.1 times less risky than Headwater Gold. It trades about 0.05 of its potential returns per unit of risk. Headwater Gold is currently generating about 0.01 per unit of risk. If you would invest 104.00 in Ampleforth on September 4, 2024 and sell it today you would earn a total of 30.00 from holding Ampleforth or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 45.84% |
| Values | Daily Returns |
Ampleforth vs. Headwater Gold
Performance |
| Timeline |
| Ampleforth |
| Headwater Gold |
Ampleforth and Headwater Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampleforth and Headwater Gold
The main advantage of trading using opposite Ampleforth and Headwater Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampleforth position performs unexpectedly, Headwater Gold 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 Headwater Gold will offset losses from the drop in Headwater Gold's long position.The idea behind Ampleforth and Headwater 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.| Headwater Gold vs. Harmony Gold Mining | Headwater Gold vs. SPACE | Headwater Gold vs. T Rowe Price | Headwater Gold vs. Ampleforth |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |