Correlation Between Asante Gold and C2C Gold
Can any of the company-specific risk be diversified away by investing in both Asante Gold and C2C 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 Asante Gold and C2C Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asante Gold and C2C Gold Corp, you can compare the effects of market volatilities on Asante Gold and C2C 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 Asante Gold with a short position of C2C Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asante Gold and C2C Gold.
Diversification Opportunities for Asante Gold and C2C Gold
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asante and C2C is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Asante Gold and C2C Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C2C Gold Corp and Asante 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 Asante Gold are associated (or correlated) with C2C Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C2C Gold Corp has no effect on the direction of Asante Gold i.e., Asante Gold and C2C Gold go up and down completely randomly.
Pair Corralation between Asante Gold and C2C Gold
Assuming the 90 days horizon Asante Gold is expected to generate 0.34 times more return on investment than C2C Gold. However, Asante Gold is 2.94 times less risky than C2C Gold. It trades about -0.19 of its potential returns per unit of risk. C2C Gold Corp is currently generating about -0.11 per unit of risk. If you would invest 97.00 in Asante Gold on August 29, 2024 and sell it today you would lose (12.00) from holding Asante Gold or give up 12.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asante Gold vs. C2C Gold Corp
Performance |
| Timeline |
| Asante Gold |
| C2C Gold Corp |
Asante Gold and C2C Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asante Gold and C2C Gold
The main advantage of trading using opposite Asante Gold and C2C Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asante Gold position performs unexpectedly, C2C 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 C2C Gold will offset losses from the drop in C2C Gold's long position.| Asante Gold vs. Minnova Corp | Asante Gold vs. Argo Gold | Asante Gold vs. Advance Gold Corp | Asante Gold 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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