Correlation Between Cerrado Gold and Star Alliance
Can any of the company-specific risk be diversified away by investing in both Cerrado Gold and Star Alliance 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 Star Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerrado Gold and Star Alliance International, you can compare the effects of market volatilities on Cerrado Gold and Star Alliance 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 Star Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerrado Gold and Star Alliance.
Diversification Opportunities for Cerrado Gold and Star Alliance
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cerrado and Star is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cerrado Gold and Star Alliance International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Alliance Intern 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 Star Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Alliance Intern has no effect on the direction of Cerrado Gold i.e., Cerrado Gold and Star Alliance go up and down completely randomly.
Pair Corralation between Cerrado Gold and Star Alliance
Assuming the 90 days horizon Cerrado Gold is expected to generate 0.56 times more return on investment than Star Alliance. However, Cerrado Gold is 1.79 times less risky than Star Alliance. It trades about -0.07 of its potential returns per unit of risk. Star Alliance International is currently generating about -0.09 per unit of risk. If you would invest 28.00 in Cerrado Gold on August 29, 2024 and sell it today you would lose (3.00) from holding Cerrado Gold or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cerrado Gold vs. Star Alliance International
Performance |
| Timeline |
| Cerrado Gold |
| Star Alliance Intern |
Cerrado Gold and Star Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerrado Gold and Star Alliance
The main advantage of trading using opposite Cerrado Gold and Star Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerrado Gold position performs unexpectedly, Star Alliance 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 Star Alliance will offset losses from the drop in Star Alliance's long position.| Cerrado Gold vs. Aurion Resources | Cerrado Gold vs. Liberty Gold Corp | Cerrado Gold vs. Orezone Gold Corp | Cerrado Gold vs. Fortuna Silver Mines |
| Star Alliance vs. Vior Inc | Star Alliance vs. Norsemont Mining | Star Alliance vs. Big Ridge Gold | Star Alliance vs. Cerrado Gold |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |