Correlation Between AuQ Gold and Dow Jones
Can any of the company-specific risk be diversified away by investing in both AuQ 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 AuQ 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 AuQ Gold Mining and Dow Jones Industrial, you can compare the effects of market volatilities on AuQ 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 AuQ Gold with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AuQ Gold and Dow Jones.
Diversification Opportunities for AuQ Gold and Dow Jones
Significant diversification
The 3 months correlation between AuQ and Dow is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding AuQ Gold Mining 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 AuQ 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 AuQ Gold Mining 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 AuQ Gold i.e., AuQ Gold and Dow Jones go up and down completely randomly.
Pair Corralation between AuQ Gold and Dow Jones
Assuming the 90 days horizon AuQ Gold Mining is expected to generate 11.37 times more return on investment than Dow Jones. However, AuQ Gold is 11.37 times more volatile than Dow Jones Industrial. It trades about 0.04 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 27.00 in AuQ Gold Mining on November 27, 2024 and sell it today you would lose (3.00) from holding AuQ Gold Mining or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AuQ Gold Mining vs. Dow Jones Industrial
Performance |
| Timeline |
AuQ Gold and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AuQ Gold Mining
Pair trading matchups for AuQ Gold
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AuQ Gold and Dow Jones
The main advantage of trading using opposite AuQ Gold and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AuQ 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.| AuQ Gold vs. Precious Metals And | AuQ Gold vs. InPlay Oil Corp | AuQ Gold vs. Verizon Communications CDR | AuQ Gold vs. GoldQuest Mining 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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