Correlation Between Gold Reserve and Asante Gold
Can any of the company-specific risk be diversified away by investing in both Gold Reserve and Asante 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 Gold Reserve and Asante Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Reserve and Asante Gold, you can compare the effects of market volatilities on Gold Reserve and Asante 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 Gold Reserve with a short position of Asante Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Reserve and Asante Gold.
Diversification Opportunities for Gold Reserve and Asante Gold
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gold and Asante is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gold Reserve and Asante Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asante Gold and Gold Reserve 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 Gold Reserve are associated (or correlated) with Asante Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asante Gold has no effect on the direction of Gold Reserve i.e., Gold Reserve and Asante Gold go up and down completely randomly.
Pair Corralation between Gold Reserve and Asante Gold
Assuming the 90 days horizon Gold Reserve is expected to under-perform the Asante Gold. In addition to that, Gold Reserve is 3.34 times more volatile than Asante Gold. It trades about -0.19 of its total potential returns per unit of risk. Asante Gold is currently generating about -0.19 per unit of volatility. If you would invest 97.00 in Asante Gold on August 29, 2024 and sell it today you would lose (12.00) from holding Asante Gold or give up 12.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Reserve vs. Asante Gold
Performance |
| Timeline |
| Gold Reserve |
| Asante Gold |
Gold Reserve and Asante Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Reserve and Asante Gold
The main advantage of trading using opposite Gold Reserve and Asante Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Reserve position performs unexpectedly, Asante 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 Asante Gold will offset losses from the drop in Asante Gold's long position.| Gold Reserve vs. Monarch Mining | Gold Reserve vs. Lundin Gold | Gold Reserve vs. Liberty Gold Corp | Gold Reserve vs. Minera Alamos |
| Asante Gold vs. Minnova Corp | Asante Gold vs. Argo Gold | Asante Gold vs. Advance Gold Corp | Asante Gold vs. Blue Star 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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