Correlation Between Amani Gold and Beston Global
Can any of the company-specific risk be diversified away by investing in both Amani Gold and Beston Global 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 Amani Gold and Beston Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amani Gold and Beston Global Food, you can compare the effects of market volatilities on Amani Gold and Beston Global 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 Amani Gold with a short position of Beston Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amani Gold and Beston Global.
Diversification Opportunities for Amani Gold and Beston Global
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Amani and Beston is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Amani Gold and Beston Global Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beston Global Food and Amani 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 Amani Gold are associated (or correlated) with Beston Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beston Global Food has no effect on the direction of Amani Gold i.e., Amani Gold and Beston Global go up and down completely randomly.
Pair Corralation between Amani Gold and Beston Global
Assuming the 90 days trading horizon Amani Gold is expected to generate 3.6 times less return on investment than Beston Global. But when comparing it to its historical volatility, Amani Gold is 3.92 times less risky than Beston Global. It trades about 0.01 of its potential returns per unit of risk. Beston Global Food is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Beston Global Food on September 26, 2024 and sell it today you would lose (2.20) from holding Beston Global Food or give up 88.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.6% |
| Values | Daily Returns |
Amani Gold vs. Beston Global Food
Performance |
| Timeline |
| Amani Gold |
| Beston Global Food |
Amani Gold and Beston Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amani Gold and Beston Global
The main advantage of trading using opposite Amani Gold and Beston Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amani Gold position performs unexpectedly, Beston Global 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 Beston Global will offset losses from the drop in Beston Global's long position.| Amani Gold vs. Northern Star Resources | Amani Gold vs. Evolution Mining | Amani Gold vs. Aneka Tambang Tbk | Amani Gold vs. Sandfire Resources NL |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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