Correlation Between HP and Augusta Gold
Can any of the company-specific risk be diversified away by investing in both HP and Augusta 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 HP and Augusta Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Augusta Gold Corp, you can compare the effects of market volatilities on HP and Augusta 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 HP with a short position of Augusta Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Augusta Gold.
Diversification Opportunities for HP and Augusta Gold
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HP and Augusta is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Augusta Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Augusta Gold Corp and HP 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 HP Inc are associated (or correlated) with Augusta Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Augusta Gold Corp has no effect on the direction of HP i.e., HP and Augusta Gold go up and down completely randomly.
Pair Corralation between HP and Augusta Gold
Considering the 90-day investment horizon HP Inc is expected to generate 0.35 times more return on investment than Augusta Gold. However, HP Inc is 2.83 times less risky than Augusta Gold. It trades about 0.04 of its potential returns per unit of risk. Augusta Gold Corp is currently generating about 0.0 per unit of risk. If you would invest 2,656 in HP Inc on August 29, 2024 and sell it today you would earn a total of 810.00 from holding HP Inc or generate 30.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. Augusta Gold Corp
Performance |
| Timeline |
| HP Inc |
| Augusta Gold Corp |
HP and Augusta Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Augusta Gold
The main advantage of trading using opposite HP and Augusta Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, Augusta 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 Augusta Gold will offset losses from the drop in Augusta Gold's long position.The idea behind HP Inc and Augusta Gold Corp 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.| Augusta Gold vs. Vertiv Holdings Co | Augusta Gold vs. Nasdaq Inc | Augusta Gold vs. McDonalds | Augusta Gold vs. Walmart |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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