Correlation Between Equinor ASA and Aya Gold
Can any of the company-specific risk be diversified away by investing in both Equinor ASA and Aya 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 Equinor ASA and Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinor ASA and Aya Gold Silver, you can compare the effects of market volatilities on Equinor ASA and Aya 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 Equinor ASA with a short position of Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinor ASA and Aya Gold.
Diversification Opportunities for Equinor ASA and Aya Gold
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equinor and Aya is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver and Equinor ASA 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 Equinor ASA are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Equinor ASA i.e., Equinor ASA and Aya Gold go up and down completely randomly.
Pair Corralation between Equinor ASA and Aya Gold
Assuming the 90 days horizon Equinor ASA is expected to generate 1.06 times less return on investment than Aya Gold. But when comparing it to its historical volatility, Equinor ASA is 1.28 times less risky than Aya Gold. It trades about 0.05 of its potential returns per unit of risk. Aya Gold Silver is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 524.00 in Aya Gold Silver on October 30, 2024 and sell it today you would earn a total of 254.00 from holding Aya Gold Silver or generate 48.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Equinor ASA vs. Aya Gold Silver
Performance |
| Timeline |
| Equinor ASA |
| Aya Gold Silver |
Equinor ASA and Aya Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinor ASA and Aya Gold
The main advantage of trading using opposite Equinor ASA and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinor ASA position performs unexpectedly, Aya 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 Aya Gold will offset losses from the drop in Aya Gold's long position.| Equinor ASA vs. AWILCO DRILLING PLC | Equinor ASA vs. Major Drilling Group | Equinor ASA vs. Jupiter Fund Management | Equinor ASA vs. NH HOTEL GROUP |
| Aya Gold vs. Cardinal Health | Aya Gold vs. PURE FOODS TASMANIA | Aya Gold vs. OPKO HEALTH | Aya Gold vs. Molson Coors Beverage |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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