Correlation Between Globex Mining and Arizona Gold
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Arizona 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 Globex Mining and Arizona Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and Arizona Gold Silver, you can compare the effects of market volatilities on Globex Mining and Arizona 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 Globex Mining with a short position of Arizona Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Arizona Gold.
Diversification Opportunities for Globex Mining and Arizona Gold
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Globex and Arizona is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Arizona Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Gold Silver and Globex Mining 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 Globex Mining Enterprises are associated (or correlated) with Arizona Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Gold Silver has no effect on the direction of Globex Mining i.e., Globex Mining and Arizona Gold go up and down completely randomly.
Pair Corralation between Globex Mining and Arizona Gold
Assuming the 90 days trading horizon Globex Mining is expected to generate 1.12 times less return on investment than Arizona Gold. But when comparing it to its historical volatility, Globex Mining Enterprises is 1.89 times less risky than Arizona Gold. It trades about 0.06 of its potential returns per unit of risk. Arizona Gold Silver is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Arizona Gold Silver on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Arizona Gold Silver or generate 13.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Arizona Gold Silver
Performance |
| Timeline |
| Globex Mining Enterprises |
| Arizona Gold Silver |
Globex Mining and Arizona Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Arizona Gold
The main advantage of trading using opposite Globex Mining and Arizona Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Arizona 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 Arizona Gold will offset losses from the drop in Arizona Gold's long position.| Globex Mining vs. First Majestic Silver | Globex Mining vs. Ivanhoe Energy | Globex Mining vs. Orezone Gold Corp | Globex Mining vs. Faraday Copper Corp |
| Arizona Gold vs. Dolly Varden Silver | Arizona Gold vs. Reyna Silver Corp | Arizona Gold vs. Aftermath Silver | Arizona Gold vs. Silver One Resources |
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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