Correlation Between Vista Gold and Asante Gold
Can any of the company-specific risk be diversified away by investing in both Vista Gold and Asante 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 Vista Gold and Asante Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Gold and Asante Gold, you can compare the effects of market volatilities on Vista Gold and Asante 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 Vista Gold with a short position of Asante Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Gold and Asante Gold.
Diversification Opportunities for Vista Gold and Asante Gold
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vista and Asante is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vista Gold and Asante Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asante Gold and Vista 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 Vista Gold are associated (or correlated) with Asante Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asante Gold has no effect on the direction of Vista Gold i.e., Vista Gold and Asante Gold go up and down completely randomly.
Pair Corralation between Vista Gold and Asante Gold
Considering the 90-day investment horizon Vista Gold is expected to generate 1.43 times more return on investment than Asante Gold. However, Vista Gold is 1.43 times more volatile than Asante Gold. It trades about 0.05 of its potential returns per unit of risk. Asante Gold is currently generating about -0.04 per unit of risk. If you would invest 56.00 in Vista Gold on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Vista Gold or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Gold vs. Asante Gold
Performance |
| Timeline |
| Vista Gold |
| Asante Gold |
Vista Gold and Asante Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Gold and Asante Gold
The main advantage of trading using opposite Vista Gold and Asante Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Gold position performs unexpectedly, Asante 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 Asante Gold will offset losses from the drop in Asante Gold's long position.| Vista Gold vs. International Tower Hill | Vista Gold vs. Harmony Gold Mining | Vista Gold vs. Seabridge Gold | Vista Gold vs. IAMGold |
| Asante Gold vs. Minnova Corp | Asante Gold vs. Argo Gold | Asante Gold vs. Advance Gold Corp | Asante Gold vs. Blue Star 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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