Correlation Between C2C Gold and Antioquia Gold

Can any of the company-specific risk be diversified away by investing in both C2C Gold and Antioquia 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 C2C Gold and Antioquia Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between C2C Gold Corp and Antioquia Gold, you can compare the effects of market volatilities on C2C Gold and Antioquia 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 C2C Gold with a short position of Antioquia Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of C2C Gold and Antioquia Gold.

Diversification Opportunities for C2C Gold and Antioquia Gold

-0.39

Correlation Coefficient

C2C Gold  Antioquia Gold

Very good diversification

The 3 months correlation between C2C and Antioquia is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding C2C Gold Corp and Antioquia Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antioquia Gold and C2C 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 C2C Gold Corp are associated (or correlated) with Antioquia Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antioquia Gold has no effect on the direction of C2C Gold i.e., C2C Gold and Antioquia Gold go up and down completely randomly.

Pair Corralation between C2C Gold and Antioquia Gold

Assuming the 90 days horizon C2C Gold is expected to generate 1.37 times less return on investment than Antioquia Gold. But when comparing it to its historical volatility, C2C Gold Corp is 1.06 times less risky than Antioquia Gold. It trades about 0.09 of its potential returns per unit of risk. Antioquia Gold is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1.10  in Antioquia Gold on September 1, 2024 and sell it today you would earn a total of  0.90  from holding Antioquia Gold or generate 81.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

C2C Gold Corp  vs.  Antioquia Gold

C2C Gold Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in C2C Gold Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, C2C Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Antioquia Gold

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with C2C Gold and Antioquia Gold

The main advantage of trading using opposite C2C Gold and Antioquia Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C2C Gold position performs unexpectedly, Antioquia 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 Antioquia Gold will offset losses from the drop in Antioquia Gold's long position.

The idea behind C2C Gold Corp and Antioquia Gold 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.