Correlation Between Asante Gold and Northern Superior
Can any of the company-specific risk be diversified away by investing in both Asante Gold and Northern Superior 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 Northern Superior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asante Gold and Northern Superior Resources, you can compare the effects of market volatilities on Asante Gold and Northern Superior 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 Northern Superior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asante Gold and Northern Superior.
Diversification Opportunities for Asante Gold and Northern Superior
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asante and Northern is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Asante Gold and Northern Superior Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Superior 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 Northern Superior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Superior has no effect on the direction of Asante Gold i.e., Asante Gold and Northern Superior go up and down completely randomly.
Pair Corralation between Asante Gold and Northern Superior
Assuming the 90 days horizon Asante Gold is expected to under-perform the Northern Superior. In addition to that, Asante Gold is 1.23 times more volatile than Northern Superior Resources. It trades about -0.32 of its total potential returns per unit of risk. Northern Superior Resources is currently generating about -0.1 per unit of volatility. If you would invest 33.00 in Northern Superior Resources on October 23, 2024 and sell it today you would lose (1.00) from holding Northern Superior Resources or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Asante Gold vs. Northern Superior Resources
Performance |
| Timeline |
| Asante Gold |
| Northern Superior |
Asante Gold and Northern Superior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asante Gold and Northern Superior
The main advantage of trading using opposite Asante Gold and Northern Superior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asante Gold position performs unexpectedly, Northern Superior 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 Northern Superior will offset losses from the drop in Northern Superior'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 |
| Northern Superior vs. Antioquia Gold | Northern Superior vs. Radisson Mining Resources | Northern Superior vs. Asante Gold | Northern Superior vs. Baru Gold Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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