Correlation Between Leons Furniture and AuQ Gold
Can any of the company-specific risk be diversified away by investing in both Leons Furniture and AuQ 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 Leons Furniture and AuQ Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leons Furniture Limited and AuQ Gold Mining, you can compare the effects of market volatilities on Leons Furniture and AuQ 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 Leons Furniture with a short position of AuQ Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leons Furniture and AuQ Gold.
Diversification Opportunities for Leons Furniture and AuQ Gold
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leons and AuQ is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Leons Furniture Limited and AuQ Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AuQ Gold Mining and Leons Furniture 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 Leons Furniture Limited are associated (or correlated) with AuQ Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AuQ Gold Mining has no effect on the direction of Leons Furniture i.e., Leons Furniture and AuQ Gold go up and down completely randomly.
Pair Corralation between Leons Furniture and AuQ Gold
Assuming the 90 days trading horizon Leons Furniture Limited is expected to generate 0.22 times more return on investment than AuQ Gold. However, Leons Furniture Limited is 4.56 times less risky than AuQ Gold. It trades about 0.04 of its potential returns per unit of risk. AuQ Gold Mining is currently generating about -0.07 per unit of risk. If you would invest 2,683 in Leons Furniture Limited on September 1, 2024 and sell it today you would earn a total of 29.00 from holding Leons Furniture Limited or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Leons Furniture Limited vs. AuQ Gold Mining
Performance |
| Timeline |
| Leons Furniture |
| AuQ Gold Mining |
Leons Furniture and AuQ Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leons Furniture and AuQ Gold
The main advantage of trading using opposite Leons Furniture and AuQ Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leons Furniture position performs unexpectedly, AuQ 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 AuQ Gold will offset losses from the drop in AuQ Gold's long position.| Leons Furniture vs. High Liner Foods | Leons Furniture vs. Richelieu Hardware | Leons Furniture vs. North West | Leons Furniture vs. Toromont Industries |
| AuQ Gold vs. Leons Furniture Limited | AuQ Gold vs. Mako Mining Corp | AuQ Gold vs. Doman Building Materials | AuQ Gold vs. Element Fleet Management |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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