Correlation Between Asante Gold and NV Gold
Can any of the company-specific risk be diversified away by investing in both Asante Gold and NV 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 NV 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 NV Gold, you can compare the effects of market volatilities on Asante Gold and NV 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 NV Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asante Gold and NV Gold.
Diversification Opportunities for Asante Gold and NV Gold
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asante and NVGLF is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Asante Gold and NV Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Gold 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 NV Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Gold has no effect on the direction of Asante Gold i.e., Asante Gold and NV Gold go up and down completely randomly.
Pair Corralation between Asante Gold and NV Gold
Assuming the 90 days horizon Asante Gold is expected to generate 305.57 times less return on investment than NV Gold. But when comparing it to its historical volatility, Asante Gold is 42.43 times less risky than NV Gold. It trades about 0.03 of its potential returns per unit of risk. NV Gold is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 52.00 in NV Gold on September 2, 2024 and sell it today you would lose (35.00) from holding NV Gold or give up 67.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.57% |
| Values | Daily Returns |
Asante Gold vs. NV Gold
Performance |
| Timeline |
| Asante Gold |
| NV Gold |
Asante Gold and NV Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asante Gold and NV Gold
The main advantage of trading using opposite Asante Gold and NV Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asante Gold position performs unexpectedly, NV 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 NV Gold will offset losses from the drop in NV Gold's long position.| Asante Gold vs. South32 Limited | Asante Gold vs. NioCorp Developments Ltd | Asante Gold vs. HUMANA INC | Asante Gold vs. SCOR PK |
| NV Gold vs. Antioquia Gold | NV Gold vs. Viva Gold Corp | NV Gold vs. Asante Gold | NV Gold vs. Bluestone Resources |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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