Correlation Between Reyna Gold and Antioquia Gold

Can any of the company-specific risk be diversified away by investing in both Reyna 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 Reyna 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 Reyna Gold Corp and Antioquia Gold, you can compare the effects of market volatilities on Reyna 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 Reyna Gold with a short position of Antioquia Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reyna Gold and Antioquia Gold.

Diversification Opportunities for Reyna Gold and Antioquia Gold

0.5

Correlation Coefficient

Reyna Gold  Antioquia Gold

Very weak diversification

The 3 months correlation between Reyna and Antioquia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Reyna 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 Reyna 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 Reyna 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 Reyna Gold i.e., Reyna Gold and Antioquia Gold go up and down completely randomly.

Pair Corralation between Reyna Gold and Antioquia Gold

Assuming the 90 days horizon Reyna Gold is expected to generate 1.56 times less return on investment than Antioquia Gold. But when comparing it to its historical volatility, Reyna Gold Corp is 2.09 times less risky than Antioquia Gold. It trades about 0.15 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 14, 2024 and sell it today you would earn a total of  0.40  from holding Antioquia Gold or generate 36.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	56.25%
Values	Daily Returns

Reyna Gold Corp  vs.  Antioquia Gold

Reyna Gold Corp

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Reyna Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile technical and fundamental indicators, Reyna 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 Reyna Gold and Antioquia Gold

The main advantage of trading using opposite Reyna Gold and Antioquia Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reyna 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 Reyna 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.