Correlation Between Augusta Gold and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Augusta Gold and Dow Jones 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 Augusta Gold and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Augusta Gold Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Augusta Gold and Dow Jones 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 Augusta Gold with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Augusta Gold and Dow Jones.
Diversification Opportunities for Augusta Gold and Dow Jones
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Augusta and Dow is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Augusta Gold Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Augusta 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 Augusta Gold Corp are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Augusta Gold i.e., Augusta Gold and Dow Jones go up and down completely randomly.
Pair Corralation between Augusta Gold and Dow Jones
Given the investment horizon of 90 days Augusta Gold Corp is expected to generate 7.34 times more return on investment than Dow Jones. However, Augusta Gold is 7.34 times more volatile than Dow Jones Industrial. It trades about 0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 125.00 in Augusta Gold Corp on September 3, 2024 and sell it today you would lose (26.00) from holding Augusta Gold Corp or give up 20.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Augusta Gold Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Augusta Gold and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Augusta Gold Corp
Pair trading matchups for Augusta Gold
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Augusta Gold and Dow Jones
The main advantage of trading using opposite Augusta Gold and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Augusta Gold position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Augusta Gold vs. Harmony Gold Mining | Augusta Gold vs. SPACE | Augusta Gold vs. T Rowe Price | Augusta Gold vs. Ampleforth |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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