Correlation Between Nine Mile and Amani Gold

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

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

Diversification Opportunities for Nine Mile and Amani Gold

0.0

Correlation Coefficient

Nine Mile  Amani Gold

Pay attention - limited upside

The 3 months correlation between Nine and Amani is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nine Mile Metals and Amani Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amani Gold Limited and Nine Mile 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 Nine Mile Metals are associated (or correlated) with Amani Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amani Gold Limited has no effect on the direction of Nine Mile i.e., Nine Mile and Amani Gold go up and down completely randomly.

Pair Corralation between Nine Mile and Amani Gold

If you would invest  0.01  in Amani Gold Limited on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Amani Gold Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Nine Mile Metals  vs.  Amani Gold Limited

Nine Mile Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nine Mile Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Amani Gold Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amani Gold Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Amani 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 Nine Mile and Amani Gold

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

The idea behind Nine Mile Metals and Amani 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.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.