Correlation Between Treasury Metals and Amani Gold
Can any of the company-specific risk be diversified away by investing in both Treasury Metals and Amani 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 Treasury Metals and Amani Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treasury Metals and Amani Gold Limited, you can compare the effects of market volatilities on Treasury Metals and Amani 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 Treasury Metals with a short position of Amani Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Metals and Amani Gold.
Diversification Opportunities for Treasury Metals and Amani Gold
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Treasury and Amani is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Metals and Amani Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amani Gold Limited and Treasury Metals 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 Treasury Metals are associated (or correlated) with Amani Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amani Gold Limited has no effect on the direction of Treasury Metals i.e., Treasury Metals and Amani Gold go up and down completely randomly.
Pair Corralation between Treasury Metals and Amani Gold
Assuming the 90 days horizon Treasury Metals is expected to generate 23.62 times less return on investment than Amani Gold. But when comparing it to its historical volatility, Treasury Metals is 3.38 times less risky than Amani Gold. It trades about 0.01 of its potential returns per unit of risk. Amani Gold Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Amani Gold Limited on September 1, 2024 and sell it today you would lose (0.02) from holding Amani Gold Limited or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.31% |
| Values | Daily Returns |
Treasury Metals vs. Amani Gold Limited
Performance |
| Timeline |
| Treasury Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Amani Gold Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Treasury Metals and Amani Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Metals and Amani Gold
The main advantage of trading using opposite Treasury Metals and Amani Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Metals position performs unexpectedly, Amani 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 Amani Gold will offset losses from the drop in Amani Gold's long position.| Treasury Metals vs. Nulegacy Gold | Treasury Metals vs. Labrador Gold Corp | Treasury Metals vs. Phenom Resources Corp | Treasury Metals vs. Rover Metals Corp |
| Amani Gold vs. Antioquia Gold | Amani Gold vs. Asante Gold | Amani Gold vs. Bluestone Resources | Amani Gold vs. Big Ridge 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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