Correlation Between Aya Gold and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Aya Gold and GoGold Resources 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 Aya Gold and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aya Gold Silver and GoGold Resources, you can compare the effects of market volatilities on Aya Gold and GoGold Resources 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 Aya Gold with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aya Gold and GoGold Resources.
Diversification Opportunities for Aya Gold and GoGold Resources
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aya and GoGold is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Aya 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 Aya Gold Silver are associated (or correlated) with GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of Aya Gold i.e., Aya Gold and GoGold Resources go up and down completely randomly.
Pair Corralation between Aya Gold and GoGold Resources
Assuming the 90 days trading horizon Aya Gold Silver is expected to under-perform the GoGold Resources. In addition to that, Aya Gold is 1.79 times more volatile than GoGold Resources. It trades about -0.22 of its total potential returns per unit of risk. GoGold Resources is currently generating about -0.34 per unit of volatility. If you would invest 162.00 in GoGold Resources on August 29, 2024 and sell it today you would lose (35.00) from holding GoGold Resources or give up 21.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aya Gold Silver vs. GoGold Resources
Performance |
| Timeline |
| Aya Gold Silver |
| GoGold Resources |
Aya Gold and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aya Gold and GoGold Resources
The main advantage of trading using opposite Aya Gold and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aya Gold position performs unexpectedly, GoGold Resources 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.The idea behind Aya Gold Silver and GoGold Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| GoGold Resources vs. First Majestic Silver | GoGold Resources vs. Ivanhoe Energy | GoGold Resources vs. Orezone Gold Corp | GoGold Resources vs. Faraday Copper 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |