Correlation Between Cambridge Capital and Austin Gold
Can any of the company-specific risk be diversified away by investing in both Cambridge Capital and Austin Gold 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 Cambridge Capital and Austin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambridge Capital Holdings and Austin Gold Corp, you can compare the effects of market volatilities on Cambridge Capital and Austin Gold 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 Cambridge Capital with a short position of Austin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambridge Capital and Austin Gold.
Diversification Opportunities for Cambridge Capital and Austin Gold
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambridge and Austin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cambridge Capital Holdings and Austin Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austin Gold Corp and Cambridge Capital 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 Cambridge Capital Holdings are associated (or correlated) with Austin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austin Gold Corp has no effect on the direction of Cambridge Capital i.e., Cambridge Capital and Austin Gold go up and down completely randomly.
Pair Corralation between Cambridge Capital and Austin Gold
Given the investment horizon of 90 days Cambridge Capital Holdings is expected to generate 8.42 times more return on investment than Austin Gold. However, Cambridge Capital is 8.42 times more volatile than Austin Gold Corp. It trades about 0.07 of its potential returns per unit of risk. Austin Gold Corp is currently generating about 0.06 per unit of risk. If you would invest 0.00 in Cambridge Capital Holdings on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Cambridge Capital Holdings or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Cambridge Capital Holdings vs. Austin Gold Corp
Performance |
| Timeline |
| Cambridge Capital |
| Austin Gold Corp |
Cambridge Capital and Austin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambridge Capital and Austin Gold
The main advantage of trading using opposite Cambridge Capital and Austin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambridge Capital position performs unexpectedly, Austin Gold 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 Austin Gold will offset losses from the drop in Austin Gold's long position.| Cambridge Capital vs. South32 Limited | Cambridge Capital vs. NioCorp Developments Ltd | Cambridge Capital vs. HUMANA INC | Cambridge Capital vs. SCOR PK |
| Austin Gold vs. Paramount Gold Nevada | Austin Gold vs. Liberty Gold Corp | Austin Gold vs. GoldMining | Austin Gold vs. International Tower Hill |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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