Correlation Between Asante Gold and Amani Gold

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

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

Diversification Opportunities for Asante Gold and Amani Gold

0.0

Correlation Coefficient

Asante Gold  Amani Gold

Pay attention - limited upside

The 3 months correlation between Asante and Amani is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asante Gold and Amani Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amani Gold Limited 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 Amani Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amani Gold Limited has no effect on the direction of Asante Gold i.e., Asante Gold and Amani Gold go up and down completely randomly.

Pair Corralation between Asante Gold and Amani Gold

If you would invest  0.01  in Amani Gold Limited on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Amani Gold Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Asante Gold  vs.  Amani Gold Limited

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Amani Gold Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amani Gold Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Amani 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 Asante Gold and Amani Gold

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

The idea behind Asante Gold and Amani Gold Limited 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 CEOs Directory module to screen CEOs from public companies around the world.