Correlation Between Aya Gold and Nucor

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

Diversification Opportunities for Aya Gold and Nucor

0.31

Correlation Coefficient

Aya Gold  Nucor

Weak diversification

The 3 months correlation between Aya and Nucor is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver and Nucor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor 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 Nucor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucor has no effect on the direction of Aya Gold i.e., Aya Gold and Nucor go up and down completely randomly.

Pair Corralation between Aya Gold and Nucor

Assuming the 90 days trading horizon Aya Gold Silver is expected to generate 1.44 times more return on investment than Nucor. However, Aya Gold is 1.44 times more volatile than Nucor. It trades about 0.04 of its potential returns per unit of risk. Nucor is currently generating about -0.01 per unit of risk. If you would invest  585.00  in Aya Gold Silver on October 23, 2024 and sell it today you would earn a total of  227.00  from holding Aya Gold Silver or generate 38.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aya Gold Silver  vs.  Nucor

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Nucor

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aya Gold and Nucor

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

The idea behind Aya Gold Silver and Nucor 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.