Correlation Between North Peak and Augusta Gold

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

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

Diversification Opportunities for North Peak and Augusta Gold

-0.69

Correlation Coefficient

North Peak  Augusta Gold

Excellent diversification

The 3 months correlation between North and Augusta is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding North Peak Resources and Augusta Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Augusta Gold Corp and North Peak 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 North Peak Resources are associated (or correlated) with Augusta Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Augusta Gold Corp has no effect on the direction of North Peak i.e., North Peak and Augusta Gold go up and down completely randomly.

Pair Corralation between North Peak and Augusta Gold

Assuming the 90 days horizon North Peak Resources is expected to under-perform the Augusta Gold. In addition to that, North Peak is 1.39 times more volatile than Augusta Gold Corp. It trades about -0.05 of its total potential returns per unit of risk. Augusta Gold Corp is currently generating about 0.2 per unit of volatility. If you would invest  61.00  in Augusta Gold Corp on September 14, 2024 and sell it today you would earn a total of  44.00  from holding Augusta Gold Corp or generate 72.13% return on investment over 90 days.

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

North Peak Resources  vs.  Augusta Gold Corp

North Peak Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days North Peak Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's essential 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.

Augusta Gold Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Augusta Gold Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Augusta Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with North Peak and Augusta Gold

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

The idea behind North Peak Resources and Augusta Gold 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.

Check out your portfolio center.

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 Stocks Directory module to find actively traded stocks across global markets.