Correlation Between Flinders Resources and Aris Gold
Can any of the company-specific risk be diversified away by investing in both Flinders Resources and Aris 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 Flinders Resources and Aris Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flinders Resources Limited and Aris Gold Corp, you can compare the effects of market volatilities on Flinders Resources and Aris 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 Flinders Resources with a short position of Aris Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flinders Resources and Aris Gold.
Diversification Opportunities for Flinders Resources and Aris Gold
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flinders and Aris is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited and Aris Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aris Gold Corp and Flinders Resources 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 Flinders Resources Limited are associated (or correlated) with Aris Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aris Gold Corp has no effect on the direction of Flinders Resources i.e., Flinders Resources and Aris Gold go up and down completely randomly.
Pair Corralation between Flinders Resources and Aris Gold
Assuming the 90 days horizon Flinders Resources Limited is expected to generate 1.34 times more return on investment than Aris Gold. However, Flinders Resources is 1.34 times more volatile than Aris Gold Corp. It trades about 0.13 of its potential returns per unit of risk. Aris Gold Corp is currently generating about -0.06 per unit of risk. If you would invest 417.00 in Flinders Resources Limited on October 23, 2024 and sell it today you would earn a total of 83.00 from holding Flinders Resources Limited or generate 19.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flinders Resources Limited vs. Aris Gold Corp
Performance |
| Timeline |
| Flinders Resources |
| Aris Gold Corp |
Flinders Resources and Aris Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flinders Resources and Aris Gold
The main advantage of trading using opposite Flinders Resources and Aris Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flinders Resources position performs unexpectedly, Aris 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 Aris Gold will offset losses from the drop in Aris Gold's long position.| Flinders Resources vs. Canso Credit Trust | Flinders Resources vs. iA Financial | Flinders Resources vs. US Financial 15 | Flinders Resources vs. Earth Alive Clean |
| Aris Gold vs. Calibre Mining Corp | Aris Gold vs. K92 Mining | Aris Gold vs. Equinox Gold Corp | Aris Gold vs. New Found 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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