Correlation Between Aya Gold and Arizona Silver

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

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

Diversification Opportunities for Aya Gold and Arizona Silver

0.15

Correlation Coefficient

Aya Gold  Arizona Silver

Average diversification

The 3 months correlation between Aya and Arizona is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver and Arizona Silver Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Silver Explo and Aya 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 Aya Gold Silver are associated (or correlated) with Arizona Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Silver Explo has no effect on the direction of Aya Gold i.e., Aya Gold and Arizona Silver go up and down completely randomly.

Pair Corralation between Aya Gold and Arizona Silver

Assuming the 90 days horizon Aya Gold Silver is expected to under-perform the Arizona Silver. In addition to that, Aya Gold is 1.05 times more volatile than Arizona Silver Exploration. It trades about -0.01 of its total potential returns per unit of risk. Arizona Silver Exploration is currently generating about 0.09 per unit of volatility. If you would invest  25.00  in Arizona Silver Exploration on September 2, 2024 and sell it today you would earn a total of  5.00  from holding Arizona Silver Exploration or generate 20.0% return on investment over 90 days.

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

Aya Gold Silver  vs.  Arizona Silver Exploration

Aya Gold Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aya Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aya Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Arizona Silver Explo

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Arizona Silver Exploration are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Arizona Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aya Gold and Arizona Silver

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

The idea behind Aya Gold Silver and Arizona Silver Exploration 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.