Correlation Between Dacian Gold and Antilles Gold

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

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

Diversification Opportunities for Dacian Gold and Antilles Gold

-0.13

Correlation Coefficient

Dacian Gold  Antilles Gold

Good diversification

The 3 months correlation between Dacian and Antilles is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dacian Gold Limited and Antilles Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antilles Gold Limited and Dacian 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 Dacian Gold Limited are associated (or correlated) with Antilles Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antilles Gold Limited has no effect on the direction of Dacian Gold i.e., Dacian Gold and Antilles Gold go up and down completely randomly.

Pair Corralation between Dacian Gold and Antilles Gold

If you would invest  1.00  in Antilles Gold Limited on September 15, 2024 and sell it today you would lose (0.70) from holding Antilles Gold Limited or give up 70.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Dacian Gold Limited  vs.  Antilles Gold Limited

Dacian Gold Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Antilles Gold Limited

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Antilles Gold Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Antilles Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dacian Gold and Antilles Gold

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

The idea behind Dacian Gold Limited and Antilles 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.