Correlation Between Gold and Aurania Resources
Can any of the company-specific risk be diversified away by investing in both Gold and Aurania Resources 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 and Aurania Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold And Gemstone and Aurania Resources, you can compare the effects of market volatilities on Gold and Aurania Resources 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 with a short position of Aurania Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold and Aurania Resources.
Diversification Opportunities for Gold and Aurania Resources
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gold and Aurania is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Gold And Gemstone and Aurania Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurania Resources and 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 Gold And Gemstone are associated (or correlated) with Aurania Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurania Resources has no effect on the direction of Gold i.e., Gold and Aurania Resources go up and down completely randomly.
Pair Corralation between Gold and Aurania Resources
Given the investment horizon of 90 days Gold And Gemstone is expected to generate 2.68 times more return on investment than Aurania Resources. However, Gold is 2.68 times more volatile than Aurania Resources. It trades about -0.01 of its potential returns per unit of risk. Aurania Resources is currently generating about -0.24 per unit of risk. If you would invest 0.08 in Gold And Gemstone on August 29, 2024 and sell it today you would lose (0.02) from holding Gold And Gemstone or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold And Gemstone vs. Aurania Resources
Performance |
| Timeline |
| Gold And Gemstone |
| Aurania Resources |
Gold and Aurania Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold and Aurania Resources
The main advantage of trading using opposite Gold and Aurania Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold position performs unexpectedly, Aurania Resources 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 Aurania Resources will offset losses from the drop in Aurania Resources' long position.| Gold vs. Brightrock Gold Corp | Gold vs. Mexus Gold Us | Gold vs. Platinum Group Metals | Gold vs. Buyer Group International |
| Aurania Resources vs. Morningstar Unconstrained Allocation | Aurania Resources vs. High Yield Municipal Fund | Aurania Resources vs. Knife River | Aurania Resources vs. Klckner Co SE |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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