Correlation Between Guanajuato Silver and Aya Gold

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Can any of the company-specific risk be diversified away by investing in both Guanajuato Silver and Aya 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 Guanajuato Silver and Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guanajuato Silver and Aya Gold Silver, you can compare the effects of market volatilities on Guanajuato Silver and Aya 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 Guanajuato Silver with a short position of Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guanajuato Silver and Aya Gold.

Diversification Opportunities for Guanajuato Silver and Aya Gold

0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between Guanajuato and Aya is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guanajuato Silver and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver and Guanajuato Silver 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 Guanajuato Silver are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Guanajuato Silver i.e., Guanajuato Silver and Aya Gold go up and down completely randomly.

Pair Corralation between Guanajuato Silver and Aya Gold

Assuming the 90 days horizon Guanajuato Silver is expected to under-perform the Aya Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Guanajuato Silver is 1.03 times less risky than Aya Gold. The otc stock trades about -0.28 of its potential returns per unit of risk. The Aya Gold Silver is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest  1,337  in Aya Gold Silver on August 24, 2024 and sell it today you would lose (386.00) from holding Aya Gold Silver or give up 28.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

Guanajuato Silver  vs.  Aya Gold Silver

 Performance 
       Timeline  
Guanajuato Silver 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Guanajuato Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Aya Gold Silver 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aya Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Guanajuato Silver and Aya Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Guanajuato Silver and Aya Gold

The main advantage of trading using opposite Guanajuato Silver and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guanajuato Silver position performs unexpectedly, Aya 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 Aya Gold will offset losses from the drop in Aya Gold's long position.
The idea behind Guanajuato Silver and Aya Gold Silver pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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