Correlation Between Arizona Gold and Canfor
Can any of the company-specific risk be diversified away by investing in both Arizona Gold and Canfor 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 Arizona Gold and Canfor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arizona Gold Silver and Canfor, you can compare the effects of market volatilities on Arizona Gold and Canfor 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 Arizona Gold with a short position of Canfor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arizona Gold and Canfor.
Diversification Opportunities for Arizona Gold and Canfor
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arizona and Canfor is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Arizona Gold Silver and Canfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor and Arizona 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 Arizona Gold Silver are associated (or correlated) with Canfor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor has no effect on the direction of Arizona Gold i.e., Arizona Gold and Canfor go up and down completely randomly.
Pair Corralation between Arizona Gold and Canfor
Assuming the 90 days horizon Arizona Gold Silver is expected to under-perform the Canfor. In addition to that, Arizona Gold is 5.7 times more volatile than Canfor. It trades about -0.11 of its total potential returns per unit of risk. Canfor is currently generating about -0.19 per unit of volatility. If you would invest 1,588 in Canfor on November 7, 2024 and sell it today you would lose (92.00) from holding Canfor or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arizona Gold Silver vs. Canfor
Performance |
| Timeline |
| Arizona Gold Silver |
| Canfor |
Arizona Gold and Canfor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arizona Gold and Canfor
The main advantage of trading using opposite Arizona Gold and Canfor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arizona Gold position performs unexpectedly, Canfor 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 Canfor will offset losses from the drop in Canfor's long position.| Arizona Gold vs. Dolly Varden Silver | Arizona Gold vs. Reyna Silver Corp | Arizona Gold vs. Aztec Minerals Corp | Arizona Gold vs. Aftermath Silver |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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