Correlation Between Mayfair Gold and Australian Oilseeds
Can any of the company-specific risk be diversified away by investing in both Mayfair Gold and Australian Oilseeds 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 Mayfair Gold and Australian Oilseeds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayfair Gold Corp and Australian Oilseeds Holdings, you can compare the effects of market volatilities on Mayfair Gold and Australian Oilseeds 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 Mayfair Gold with a short position of Australian Oilseeds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayfair Gold and Australian Oilseeds.
Diversification Opportunities for Mayfair Gold and Australian Oilseeds
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mayfair and Australian is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp and Australian Oilseeds Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Oilseeds and Mayfair Gold 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 Mayfair Gold Corp are associated (or correlated) with Australian Oilseeds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Oilseeds has no effect on the direction of Mayfair Gold i.e., Mayfair Gold and Australian Oilseeds go up and down completely randomly.
Pair Corralation between Mayfair Gold and Australian Oilseeds
Assuming the 90 days horizon Mayfair Gold Corp is expected to generate 0.38 times more return on investment than Australian Oilseeds. However, Mayfair Gold Corp is 2.6 times less risky than Australian Oilseeds. It trades about -0.02 of its potential returns per unit of risk. Australian Oilseeds Holdings is currently generating about -0.08 per unit of risk. If you would invest 164.00 in Mayfair Gold Corp on September 15, 2024 and sell it today you would lose (36.00) from holding Mayfair Gold Corp or give up 21.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayfair Gold Corp vs. Australian Oilseeds Holdings
Performance |
| Timeline |
| Mayfair Gold Corp |
| Australian Oilseeds |
Mayfair Gold and Australian Oilseeds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayfair Gold and Australian Oilseeds
The main advantage of trading using opposite Mayfair Gold and Australian Oilseeds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfair Gold position performs unexpectedly, Australian Oilseeds 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 Australian Oilseeds will offset losses from the drop in Australian Oilseeds' long position.| Mayfair Gold vs. Revival Gold | Mayfair Gold vs. Galiano Gold | Mayfair Gold vs. US Gold Corp | Mayfair Gold vs. HUMANA INC |
| Australian Oilseeds vs. Merit Medical Systems | Australian Oilseeds vs. LENSAR Inc | Australian Oilseeds vs. Air Products and | Australian Oilseeds vs. Delek Drilling |
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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