Correlation Between New World and Antioquia Gold
Can any of the company-specific risk be diversified away by investing in both New World 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 New World and Antioquia Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New World Gold and Antioquia Gold, you can compare the effects of market volatilities on New World 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 New World with a short position of Antioquia Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of New World and Antioquia Gold.
Diversification Opportunities for New World and Antioquia Gold
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between New and Antioquia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding New World Gold and Antioquia Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antioquia Gold and New World 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 New World Gold 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 New World i.e., New World and Antioquia Gold go up and down completely randomly.
Pair Corralation between New World and Antioquia Gold
Given the investment horizon of 90 days New World Gold is expected to generate 5.54 times more return on investment than Antioquia Gold. However, New World is 5.54 times more volatile than Antioquia Gold. It trades about 0.17 of its potential returns per unit of risk. Antioquia Gold is currently generating about 0.06 per unit of risk. If you would invest 0.01 in New World Gold on September 15, 2024 and sell it today you would earn a total of 0.00 from holding New World Gold or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 99.21% |
Values | Daily Returns |
New World Gold vs. Antioquia Gold
Performance |
Timeline |
New World Gold |
Antioquia Gold |
New World and Antioquia Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New World and Antioquia Gold
The main advantage of trading using opposite New World and Antioquia Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New World 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.New World vs. Revival Gold | New World vs. Galiano Gold | New World vs. US Gold Corp | New World vs. HUMANA INC |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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