Correlation Between TVI Pacific and Aya Gold

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

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

Diversification Opportunities for TVI Pacific and Aya Gold

-0.28

Correlation Coefficient

TVI Pacific  Aya Gold

Very good diversification

The 3 months correlation between TVI and Aya is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding TVI Pacific and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver and TVI Pacific 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 TVI Pacific are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of TVI Pacific i.e., TVI Pacific and Aya Gold go up and down completely randomly.

Pair Corralation between TVI Pacific and Aya Gold

Assuming the 90 days horizon TVI Pacific is expected to generate 10.72 times more return on investment than Aya Gold. However, TVI Pacific is 10.72 times more volatile than Aya Gold Silver. It trades about 0.18 of its potential returns per unit of risk. Aya Gold Silver is currently generating about -0.01 per unit of risk. If you would invest  0.25  in TVI Pacific on September 2, 2024 and sell it today you would earn a total of  1.55  from holding TVI Pacific or generate 620.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

TVI Pacific  vs.  Aya Gold Silver

TVI Pacific

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TVI Pacific are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TVI Pacific reported solid returns over the last few months and may actually be approaching a breakup point.

Aya Gold Silver

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TVI Pacific and Aya Gold

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

The idea behind TVI Pacific and Aya Gold Silver 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.