Correlation Between Austin Gold and Pan American
Can any of the company-specific risk be diversified away by investing in both Austin Gold and Pan American 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 Austin Gold and Pan American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austin Gold Corp and Pan American Silver, you can compare the effects of market volatilities on Austin Gold and Pan American 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 Austin Gold with a short position of Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austin Gold and Pan American.
Diversification Opportunities for Austin Gold and Pan American
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Austin and Pan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Austin Gold Corp and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver and Austin 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 Austin Gold Corp are associated (or correlated) with Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of Austin Gold i.e., Austin Gold and Pan American go up and down completely randomly.
Pair Corralation between Austin Gold and Pan American
Given the investment horizon of 90 days Austin Gold Corp is expected to under-perform the Pan American. In addition to that, Austin Gold is 3.98 times more volatile than Pan American Silver. It trades about -0.05 of its total potential returns per unit of risk. Pan American Silver is currently generating about -0.17 per unit of volatility. If you would invest 2,543 in Pan American Silver on August 24, 2024 and sell it today you would lose (252.00) from holding Pan American Silver or give up 9.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austin Gold Corp vs. Pan American Silver
Performance |
| Timeline |
| Austin Gold Corp |
| Pan American Silver |
Austin Gold and Pan American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austin Gold and Pan American
The main advantage of trading using opposite Austin Gold and Pan American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austin Gold position performs unexpectedly, Pan American 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 Pan American will offset losses from the drop in Pan American's long position.| Austin Gold vs. Paramount Gold Nevada | Austin Gold vs. Liberty Gold Corp | Austin Gold vs. GoldMining | Austin Gold vs. International Tower Hill |
| Pan American vs. Newmont Goldcorp Corp | Pan American vs. Wheaton Precious Metals | Pan American vs. Franco Nevada | Pan American vs. Kinross 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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