Correlation Between Antioquia Gold and Minaurum Gold

Can any of the company-specific risk be diversified away by investing in both Antioquia Gold and Minaurum 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 Antioquia Gold and Minaurum Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Antioquia Gold and Minaurum Gold, you can compare the effects of market volatilities on Antioquia Gold and Minaurum 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 Antioquia Gold with a short position of Minaurum Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antioquia Gold and Minaurum Gold.

Diversification Opportunities for Antioquia Gold and Minaurum Gold

-0.62

Correlation Coefficient

Antioquia Gold  Minaurum Gold

Excellent diversification

The 3 months correlation between Antioquia and Minaurum is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Antioquia Gold and Minaurum Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minaurum Gold and Antioquia 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 Antioquia Gold are associated (or correlated) with Minaurum Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minaurum Gold has no effect on the direction of Antioquia Gold i.e., Antioquia Gold and Minaurum Gold go up and down completely randomly.

Pair Corralation between Antioquia Gold and Minaurum Gold

Assuming the 90 days horizon Antioquia Gold is expected to generate 2.12 times more return on investment than Minaurum Gold. However, Antioquia Gold is 2.12 times more volatile than Minaurum Gold. It trades about 0.11 of its potential returns per unit of risk. Minaurum Gold is currently generating about 0.01 per unit of risk. If you would invest  1.10  in Antioquia Gold on September 4, 2024 and sell it today you would earn a total of  0.90  from holding Antioquia Gold or generate 81.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Antioquia Gold  vs.  Minaurum Gold

Antioquia Gold

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Antioquia Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Antioquia Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Minaurum Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minaurum Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Minaurum Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Antioquia Gold and Minaurum Gold

The main advantage of trading using opposite Antioquia Gold and Minaurum Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antioquia Gold position performs unexpectedly, Minaurum 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 Minaurum Gold will offset losses from the drop in Minaurum Gold's long position.

The idea behind Antioquia Gold and Minaurum Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.