Correlation Between Cerrado Gold and Antioquia Gold
Can any of the company-specific risk be diversified away by investing in both Cerrado Gold and Antioquia 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 Cerrado Gold and Antioquia Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerrado Gold and Antioquia Gold, you can compare the effects of market volatilities on Cerrado Gold and Antioquia 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 Cerrado Gold with a short position of Antioquia Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerrado Gold and Antioquia Gold.
Diversification Opportunities for Cerrado Gold and Antioquia Gold
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cerrado and Antioquia is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cerrado Gold and Antioquia Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antioquia Gold and Cerrado 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 Cerrado Gold are associated (or correlated) with Antioquia Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antioquia Gold has no effect on the direction of Cerrado Gold i.e., Cerrado Gold and Antioquia Gold go up and down completely randomly.
Pair Corralation between Cerrado Gold and Antioquia Gold
Assuming the 90 days horizon Cerrado Gold is expected to generate 5.26 times less return on investment than Antioquia Gold. But when comparing it to its historical volatility, Cerrado Gold is 6.9 times less risky than Antioquia Gold. It trades about 0.08 of its potential returns per unit of risk. Antioquia Gold is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Antioquia Gold on November 2, 2024 and sell it today you would lose (1.00) from holding Antioquia Gold or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Cerrado Gold vs. Antioquia Gold
Performance |
| Timeline |
| Cerrado Gold |
| Antioquia Gold |
Cerrado Gold and Antioquia Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerrado Gold and Antioquia Gold
The main advantage of trading using opposite Cerrado Gold and Antioquia Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerrado Gold position performs unexpectedly, Antioquia 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 Antioquia Gold will offset losses from the drop in Antioquia Gold's long position.| Cerrado Gold vs. Antioquia Gold | Cerrado Gold vs. Red Pine Exploration | Cerrado Gold vs. Bellevue Gold Limited | Cerrado Gold vs. Asante Gold |
| Antioquia Gold vs. Argo Gold | Antioquia Gold vs. Blue Star Gold | Antioquia Gold vs. Angkor Resources Corp | Antioquia Gold vs. Advance 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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