Correlation Between FARM 51 and Americas Gold
Can any of the company-specific risk be diversified away by investing in both FARM 51 and Americas 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 FARM 51 and Americas Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARM 51 GROUP and Americas Gold and, you can compare the effects of market volatilities on FARM 51 and Americas 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 FARM 51 with a short position of Americas Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and Americas Gold.
Diversification Opportunities for FARM 51 and Americas Gold
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FARM and Americas is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP and Americas Gold and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americas Gold and FARM 51 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 FARM 51 GROUP are associated (or correlated) with Americas Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americas Gold has no effect on the direction of FARM 51 i.e., FARM 51 and Americas Gold go up and down completely randomly.
Pair Corralation between FARM 51 and Americas Gold
Assuming the 90 days horizon FARM 51 is expected to generate 16.3 times less return on investment than Americas Gold. But when comparing it to its historical volatility, FARM 51 GROUP is 2.36 times less risky than Americas Gold. It trades about 0.01 of its potential returns per unit of risk. Americas Gold and is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Americas Gold and on November 5, 2024 and sell it today you would earn a total of 26.00 from holding Americas Gold and or generate 118.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM 51 GROUP vs. Americas Gold and
Performance |
| Timeline |
| FARM 51 GROUP |
| Americas Gold |
FARM 51 and Americas Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM 51 and Americas Gold
The main advantage of trading using opposite FARM 51 and Americas Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 position performs unexpectedly, Americas 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 Americas Gold will offset losses from the drop in Americas Gold's long position.| FARM 51 vs. BRIT AMER TOBACCO | FARM 51 vs. Guangdong Investment Limited | FARM 51 vs. The Trade Desk | FARM 51 vs. JAPAN TOBACCO UNSPADR12 |
| Americas Gold vs. Pan American Silver | Americas Gold vs. First Majestic Silver | Americas Gold vs. MAG Silver Corp | Americas Gold vs. Silvercorp Metals |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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