Correlation Between Angus Gold and Paramount Gold
Can any of the company-specific risk be diversified away by investing in both Angus Gold and Paramount 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 Angus Gold and Paramount Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angus Gold and Paramount Gold Nevada, you can compare the effects of market volatilities on Angus Gold and Paramount 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 Angus Gold with a short position of Paramount Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angus Gold and Paramount Gold.
Diversification Opportunities for Angus Gold and Paramount Gold
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Angus and Paramount is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Angus Gold and Paramount Gold Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Gold Nevada and Angus 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 Angus Gold are associated (or correlated) with Paramount Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Gold Nevada has no effect on the direction of Angus Gold i.e., Angus Gold and Paramount Gold go up and down completely randomly.
Pair Corralation between Angus Gold and Paramount Gold
Assuming the 90 days horizon Angus Gold is expected to generate 1.48 times less return on investment than Paramount Gold. In addition to that, Angus Gold is 1.72 times more volatile than Paramount Gold Nevada. It trades about 0.01 of its total potential returns per unit of risk. Paramount Gold Nevada is currently generating about 0.03 per unit of volatility. If you would invest 34.00 in Paramount Gold Nevada on November 2, 2024 and sell it today you would earn a total of 5.00 from holding Paramount Gold Nevada or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angus Gold vs. Paramount Gold Nevada
Performance |
| Timeline |
| Angus Gold |
| Paramount Gold Nevada |
Angus Gold and Paramount Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angus Gold and Paramount Gold
The main advantage of trading using opposite Angus Gold and Paramount Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angus Gold position performs unexpectedly, Paramount 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 Paramount Gold will offset losses from the drop in Paramount Gold's long position.| Angus Gold vs. Minnova Corp | Angus Gold vs. Argo Gold | Angus Gold vs. Advance Gold Corp | Angus Gold vs. Blue Star Gold |
| Paramount Gold vs. Vista Gold | Paramount Gold vs. International Tower Hill | Paramount Gold vs. Avino Silver Gold | Paramount Gold vs. Seabridge 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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