Correlation Between Aztec Minerals and Dynacor Gold

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

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

Diversification Opportunities for Aztec Minerals and Dynacor Gold

0.36

Correlation Coefficient

Aztec Minerals  Dynacor Gold

Weak diversification

The 3 months correlation between Aztec and Dynacor is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aztec Minerals Corp and Dynacor Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynacor Gold Mines and Aztec Minerals 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 Aztec Minerals Corp are associated (or correlated) with Dynacor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynacor Gold Mines has no effect on the direction of Aztec Minerals i.e., Aztec Minerals and Dynacor Gold go up and down completely randomly.

Pair Corralation between Aztec Minerals and Dynacor Gold

Assuming the 90 days horizon Aztec Minerals Corp is expected to generate 3.88 times more return on investment than Dynacor Gold. However, Aztec Minerals is 3.88 times more volatile than Dynacor Gold Mines. It trades about 0.05 of its potential returns per unit of risk. Dynacor Gold Mines is currently generating about 0.09 per unit of risk. If you would invest  18.00  in Aztec Minerals Corp on September 20, 2024 and sell it today you would earn a total of  1.00  from holding Aztec Minerals Corp or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Aztec Minerals Corp  vs.  Dynacor Gold Mines

Aztec Minerals Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aztec Minerals Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Aztec Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Dynacor Gold Mines

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dynacor Gold Mines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Dynacor Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aztec Minerals and Dynacor Gold

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

The idea behind Aztec Minerals Corp and Dynacor Gold Mines 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.