Correlation Between Aya Gold and Great West
Can any of the company-specific risk be diversified away by investing in both Aya Gold and Great West 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 Great West 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 Great West Lifeco, you can compare the effects of market volatilities on Aya Gold and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aya Gold and Great West.
Diversification Opportunities for Aya Gold and Great West
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aya and Great is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Aya Gold i.e., Aya Gold and Great West go up and down completely randomly.
Pair Corralation between Aya Gold and Great West
Assuming the 90 days trading horizon Aya Gold Silver is expected to under-perform the Great West. In addition to that, Aya Gold is 11.65 times more volatile than Great West Lifeco. It trades about -0.23 of its total potential returns per unit of risk. Great West Lifeco is currently generating about -0.24 per unit of volatility. If you would invest 2,174 in Great West Lifeco on August 28, 2024 and sell it today you would lose (55.00) from holding Great West Lifeco or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aya Gold Silver vs. Great West Lifeco
Performance |
| Timeline |
| Aya Gold Silver |
| Great West Lifeco |
Aya Gold and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aya Gold and Great West
The main advantage of trading using opposite Aya Gold and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aya Gold position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.The idea behind Aya Gold Silver and Great West Lifeco 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.| Great West vs. Perseus Mining | Great West vs. Jamieson Wellness | Great West vs. T2 Metals Corp | Great West vs. Ramp Metals |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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