Correlation Between Ampleforth and Leviathan Gold
Can any of the company-specific risk be diversified away by investing in both Ampleforth and Leviathan 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 Leviathan Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampleforth and Leviathan Gold, you can compare the effects of market volatilities on Ampleforth and Leviathan 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 Leviathan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampleforth and Leviathan Gold.
Diversification Opportunities for Ampleforth and Leviathan Gold
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ampleforth and Leviathan is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ampleforth and Leviathan Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leviathan 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 Leviathan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leviathan Gold has no effect on the direction of Ampleforth i.e., Ampleforth and Leviathan Gold go up and down completely randomly.
Pair Corralation between Ampleforth and Leviathan Gold
Assuming the 90 days trading horizon Ampleforth is expected to generate 0.64 times more return on investment than Leviathan Gold. However, Ampleforth is 1.56 times less risky than Leviathan Gold. It trades about 0.1 of its potential returns per unit of risk. Leviathan Gold is currently generating about -0.02 per unit of risk. If you would invest 92.00 in Ampleforth on September 4, 2024 and sell it today you would earn a total of 42.00 from holding Ampleforth or generate 45.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.55% |
| Values | Daily Returns |
Ampleforth vs. Leviathan Gold
Performance |
| Timeline |
| Ampleforth |
| Leviathan Gold |
Ampleforth and Leviathan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampleforth and Leviathan Gold
The main advantage of trading using opposite Ampleforth and Leviathan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampleforth position performs unexpectedly, Leviathan 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 Leviathan Gold will offset losses from the drop in Leviathan Gold's long position.The idea behind Ampleforth and Leviathan 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.| Leviathan Gold vs. Harmony Gold Mining | Leviathan Gold vs. SPACE | Leviathan Gold vs. T Rowe Price | Leviathan 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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