Correlation Between Austral Gold and Global Pole

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Can any of the company-specific risk be diversified away by investing in both Austral Gold and Global Pole 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 Austral Gold and Global Pole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austral Gold Limited and Global Pole Trusion, you can compare the effects of market volatilities on Austral Gold and Global Pole 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 Austral Gold with a short position of Global Pole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austral Gold and Global Pole.

Diversification Opportunities for Austral Gold and Global Pole

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Austral and Global is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Austral Gold Limited and Global Pole Trusion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Pole Trusion and Austral 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 Austral Gold Limited are associated (or correlated) with Global Pole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Pole Trusion has no effect on the direction of Austral Gold i.e., Austral Gold and Global Pole go up and down completely randomly.

Pair Corralation between Austral Gold and Global Pole

If you would invest  2.06  in Austral Gold Limited on September 26, 2024 and sell it today you would lose (0.10) from holding Austral Gold Limited or give up 4.85% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Austral Gold Limited  vs.  Global Pole Trusion

 Performance 
       Timeline  
Austral Gold Limited 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Austral Gold Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Austral Gold reported solid returns over the last few months and may actually be approaching a breakup point.
Global Pole Trusion 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Global Pole Trusion are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Global Pole exhibited solid returns over the last few months and may actually be approaching a breakup point.

Austral Gold and Global Pole Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Austral Gold and Global Pole

The main advantage of trading using opposite Austral Gold and Global Pole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austral Gold position performs unexpectedly, Global Pole 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 Global Pole will offset losses from the drop in Global Pole's long position.
The idea behind Austral Gold Limited and Global Pole Trusion 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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