Correlation Between Arizona Sonoran and Canagold Resources

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

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

Diversification Opportunities for Arizona Sonoran and Canagold Resources

0.61

Correlation Coefficient

Arizona Sonoran  Canagold Resources

Poor diversification

The 3 months correlation between Arizona and Canagold is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Arizona Sonoran Copper and Canagold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canagold Resources and Arizona Sonoran 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 Arizona Sonoran Copper are associated (or correlated) with Canagold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canagold Resources has no effect on the direction of Arizona Sonoran i.e., Arizona Sonoran and Canagold Resources go up and down completely randomly.

Pair Corralation between Arizona Sonoran and Canagold Resources

Assuming the 90 days trading horizon Arizona Sonoran Copper is expected to under-perform the Canagold Resources. But the stock apears to be less risky and, when comparing its historical volatility, Arizona Sonoran Copper is 1.13 times less risky than Canagold Resources. The stock trades about -0.01 of its potential returns per unit of risk. The Canagold Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Canagold Resources on September 21, 2024 and sell it today you would earn a total of  10.00  from holding Canagold Resources or generate 55.56% return on investment over 90 days.

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

Arizona Sonoran Copper  vs.  Canagold Resources

Arizona Sonoran Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arizona Sonoran Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Canagold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canagold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Arizona Sonoran and Canagold Resources

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

The idea behind Arizona Sonoran Copper and Canagold Resources 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.