Correlation Between Sixty North and Ascot Resources

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

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

Diversification Opportunities for Sixty North and Ascot Resources

-0.32

Correlation Coefficient

Sixty North  Ascot Resources

Very good diversification

The 3 months correlation between Sixty and Ascot is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sixty North Gold and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources and Sixty North 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 Sixty North Gold are associated (or correlated) with Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Sixty North i.e., Sixty North and Ascot Resources go up and down completely randomly.

Pair Corralation between Sixty North and Ascot Resources

Assuming the 90 days horizon Sixty North Gold is expected to generate 1.79 times more return on investment than Ascot Resources. However, Sixty North is 1.79 times more volatile than Ascot Resources. It trades about -0.15 of its potential returns per unit of risk. Ascot Resources is currently generating about -0.44 per unit of risk. If you would invest  7.07  in Sixty North Gold on September 23, 2024 and sell it today you would lose (2.07) from holding Sixty North Gold or give up 29.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Sixty North Gold  vs.  Ascot Resources

Sixty North Gold

Risk-Adjusted Performance

6 of 100

Modest

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

Ascot Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ascot Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ascot Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sixty North and Ascot Resources

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

The idea behind Sixty North Gold and Ascot Resources 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.