Correlation Between Aura Minerals and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Aura Minerals and GoGold Resources 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 Aura Minerals and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Minerals and GoGold Resources, you can compare the effects of market volatilities on Aura Minerals and GoGold Resources 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 Aura Minerals with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Minerals and GoGold Resources.
Diversification Opportunities for Aura Minerals and GoGold Resources
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aura and GoGold is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Aura Minerals 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 Aura Minerals are associated (or correlated) with GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of Aura Minerals i.e., Aura Minerals and GoGold Resources go up and down completely randomly.
Pair Corralation between Aura Minerals and GoGold Resources
Assuming the 90 days trading horizon Aura Minerals is expected to generate 0.66 times more return on investment than GoGold Resources. However, Aura Minerals is 1.51 times less risky than GoGold Resources. It trades about 0.12 of its potential returns per unit of risk. GoGold Resources is currently generating about 0.02 per unit of risk. If you would invest 769.00 in Aura Minerals on August 29, 2024 and sell it today you would earn a total of 944.00 from holding Aura Minerals or generate 122.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Minerals vs. GoGold Resources
Performance |
| Timeline |
| Aura Minerals |
| GoGold Resources |
Aura Minerals and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Minerals and GoGold Resources
The main advantage of trading using opposite Aura Minerals and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Minerals position performs unexpectedly, GoGold Resources 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.| Aura Minerals vs. Entree Resources | Aura Minerals vs. Wesdome Gold Mines | Aura Minerals vs. Eastern Platinum Limited | Aura Minerals vs. Platinum Group Metals |
| GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Liberty Gold Corp | GoGold Resources vs. Dolly Varden Silver | GoGold Resources vs. Minaurum Gold |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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