Correlation Between Centerra Gold and Arizona Metals
Can any of the company-specific risk be diversified away by investing in both Centerra Gold and Arizona Metals 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 Centerra Gold and Arizona Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centerra Gold and Arizona Metals Corp, you can compare the effects of market volatilities on Centerra Gold and Arizona Metals 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 Centerra Gold with a short position of Arizona Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centerra Gold and Arizona Metals.
Diversification Opportunities for Centerra Gold and Arizona Metals
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centerra and Arizona is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Centerra Gold and Arizona Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Metals Corp and Centerra 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 Centerra Gold are associated (or correlated) with Arizona Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Metals Corp has no effect on the direction of Centerra Gold i.e., Centerra Gold and Arizona Metals go up and down completely randomly.
Pair Corralation between Centerra Gold and Arizona Metals
Assuming the 90 days horizon Centerra Gold is expected to generate 0.58 times more return on investment than Arizona Metals. However, Centerra Gold is 1.72 times less risky than Arizona Metals. It trades about 0.02 of its potential returns per unit of risk. Arizona Metals Corp is currently generating about 0.0 per unit of risk. If you would invest 781.00 in Centerra Gold on September 1, 2024 and sell it today you would earn a total of 64.00 from holding Centerra Gold or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centerra Gold vs. Arizona Metals Corp
Performance |
| Timeline |
| Centerra Gold |
| Arizona Metals Corp |
Centerra Gold and Arizona Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centerra Gold and Arizona Metals
The main advantage of trading using opposite Centerra Gold and Arizona Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centerra Gold position performs unexpectedly, Arizona Metals 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 Arizona Metals will offset losses from the drop in Arizona Metals' long position.| Centerra Gold vs. Alamos Gold | Centerra Gold vs. NovaGold Resources | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. IAMGold |
| Arizona Metals vs. i 80 Gold Corp | Arizona Metals vs. Ressources Minieres Radisson | Arizona Metals vs. Amerigo Resources | Arizona Metals vs. Aris Gold 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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