Correlation Between Antilles Gold and GMV Minerals

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

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

Diversification Opportunities for Antilles Gold and GMV Minerals

-0.33

Correlation Coefficient

Antilles Gold  GMV Minerals

Very good diversification

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

Pair Corralation between Antilles Gold and GMV Minerals

Assuming the 90 days horizon Antilles Gold Limited is expected to generate 1.99 times more return on investment than GMV Minerals. However, Antilles Gold is 1.99 times more volatile than GMV Minerals. It trades about 0.06 of its potential returns per unit of risk. GMV Minerals is currently generating about 0.04 per unit of risk. If you would invest  1.00  in Antilles Gold Limited on September 15, 2024 and sell it today you would lose (0.70) from holding Antilles Gold Limited or give up 70.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Antilles Gold Limited  vs.  GMV Minerals

Antilles Gold Limited

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Antilles Gold Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Antilles Gold reported solid returns over the last few months and may actually be approaching a breakup point.

GMV Minerals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GMV Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, GMV Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Antilles Gold and GMV Minerals

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

The idea behind Antilles Gold Limited and GMV Minerals 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.