Correlation Between Asante Gold and Minnova Corp

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

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

Diversification Opportunities for Asante Gold and Minnova Corp

0.48

Correlation Coefficient

Asante Gold  Minnova Corp

Very weak diversification

The 3 months correlation between Asante and Minnova is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Asante Gold and Minnova Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minnova Corp and Asante 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 Asante Gold are associated (or correlated) with Minnova Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minnova Corp has no effect on the direction of Asante Gold i.e., Asante Gold and Minnova Corp go up and down completely randomly.

Pair Corralation between Asante Gold and Minnova Corp

Assuming the 90 days horizon Asante Gold is expected to under-perform the Minnova Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Asante Gold is 48.17 times less risky than Minnova Corp. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Minnova Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.21  in Minnova Corp on September 3, 2024 and sell it today you would earn a total of  0.05  from holding Minnova Corp or generate 23.81% return on investment over 90 days.

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

Asante Gold  vs.  Minnova Corp

Asante Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asante Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Minnova Corp

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Asante Gold and Minnova Corp

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

The idea behind Asante Gold and Minnova Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.