Correlation Between Aya Gold and Klpierre

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

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

Diversification Opportunities for Aya Gold and Klpierre

-0.06

Correlation Coefficient

Aya Gold  Klpierre

Good diversification

The 3 months correlation between Aya and Klpierre is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA and Aya 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 Aya Gold Silver are associated (or correlated) with Klpierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of Aya Gold i.e., Aya Gold and Klpierre go up and down completely randomly.

Pair Corralation between Aya Gold and Klpierre

Assuming the 90 days trading horizon Aya Gold Silver is expected to generate 4.02 times more return on investment than Klpierre. However, Aya Gold is 4.02 times more volatile than Klpierre SA. It trades about 0.09 of its potential returns per unit of risk. Klpierre SA is currently generating about 0.2 per unit of risk. If you would invest  729.00  in Aya Gold Silver on December 21, 2024 and sell it today you would earn a total of  136.00  from holding Aya Gold Silver or generate 18.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aya Gold Silver  vs.  Klpierre SA

Aya Gold Silver

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aya Gold Silver are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Aya Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Klpierre SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Klpierre SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Klpierre reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aya Gold and Klpierre

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

The idea behind Aya Gold Silver and Klpierre SA 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.