Correlation Between Gold Springs and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both Gold Springs and Aurion 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 Springs and Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Springs Resource and Aurion Resources, you can compare the effects of market volatilities on Gold Springs and Aurion 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 Springs with a short position of Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Springs and Aurion Resources.
Diversification Opportunities for Gold Springs and Aurion Resources
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gold and Aurion is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Gold Springs Resource and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and Gold Springs 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 Springs Resource are associated (or correlated) with Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of Gold Springs i.e., Gold Springs and Aurion Resources go up and down completely randomly.
Pair Corralation between Gold Springs and Aurion Resources
Assuming the 90 days horizon Gold Springs Resource is expected to generate 1.89 times more return on investment than Aurion Resources. However, Gold Springs is 1.89 times more volatile than Aurion Resources. It trades about 0.03 of its potential returns per unit of risk. Aurion Resources is currently generating about 0.02 per unit of risk. If you would invest 10.00 in Gold Springs Resource on August 29, 2024 and sell it today you would lose (3.20) from holding Gold Springs Resource or give up 32.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Springs Resource vs. Aurion Resources
Performance |
| Timeline |
| Gold Springs Resource |
| Aurion Resources |
Gold Springs and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Springs and Aurion Resources
The main advantage of trading using opposite Gold Springs and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Springs position performs unexpectedly, Aurion 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 Aurion Resources will offset losses from the drop in Aurion Resources' long position.| Gold Springs vs. Palamina Corp | Gold Springs vs. BTU Metals Corp | Gold Springs vs. Norsemont Mining | Gold Springs vs. FireFox Gold Corp |
| Aurion Resources vs. Minnova Corp | Aurion Resources vs. Argo Gold | Aurion Resources vs. Advance Gold Corp | Aurion Resources 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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