Correlation Between INSURANCE AUST and Americas Gold
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and Americas 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 INSURANCE AUST and Americas Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and Americas Gold and, you can compare the effects of market volatilities on INSURANCE AUST and Americas 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 INSURANCE AUST with a short position of Americas Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and Americas Gold.
Diversification Opportunities for INSURANCE AUST and Americas Gold
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between INSURANCE and Americas is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and Americas Gold and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americas Gold and INSURANCE AUST 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 INSURANCE AUST GRP are associated (or correlated) with Americas Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americas Gold has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and Americas Gold go up and down completely randomly.
Pair Corralation between INSURANCE AUST and Americas Gold
Assuming the 90 days trading horizon INSURANCE AUST is expected to generate 8.16 times less return on investment than Americas Gold. But when comparing it to its historical volatility, INSURANCE AUST GRP is 3.94 times less risky than Americas Gold. It trades about 0.22 of its potential returns per unit of risk. Americas Gold and is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Americas Gold and on October 29, 2024 and sell it today you would earn a total of 16.00 from holding Americas Gold and or generate 47.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. Americas Gold and
Performance |
| Timeline |
| INSURANCE AUST GRP |
| Americas Gold |
INSURANCE AUST and Americas Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and Americas Gold
The main advantage of trading using opposite INSURANCE AUST and Americas Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, Americas 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 Americas Gold will offset losses from the drop in Americas Gold's long position.| INSURANCE AUST vs. Canon Marketing Japan | INSURANCE AUST vs. CANON MARKETING JP | INSURANCE AUST vs. Tradeweb Markets | INSURANCE AUST vs. DICKS Sporting Goods |
| Americas Gold vs. Endeavour Silver Corp | Americas Gold vs. Superior Plus Corp | Americas Gold vs. Origin Agritech | Americas Gold vs. Identiv |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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