Correlation Between GoldMining and Athelney Trust

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

By analyzing existing cross correlation between GoldMining and Athelney Trust plc, you can compare the effects of market volatilities on GoldMining and Athelney Trust 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 GoldMining with a short position of Athelney Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Athelney Trust.

Diversification Opportunities for GoldMining and Athelney Trust

-0.41

Correlation Coefficient

GoldMining  Athelney Trust

Very good diversification

The 3 months correlation between GoldMining and Athelney is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Athelney Trust plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athelney Trust plc and GoldMining 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 GoldMining are associated (or correlated) with Athelney Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athelney Trust plc has no effect on the direction of GoldMining i.e., GoldMining and Athelney Trust go up and down completely randomly.

Pair Corralation between GoldMining and Athelney Trust

Assuming the 90 days trading horizon GoldMining is expected to under-perform the Athelney Trust. In addition to that, GoldMining is 1.65 times more volatile than Athelney Trust plc. It trades about -0.2 of its total potential returns per unit of risk. Athelney Trust plc is currently generating about 0.22 per unit of volatility. If you would invest  17,500  in Athelney Trust plc on October 10, 2024 and sell it today you would earn a total of  1,000.00  from holding Athelney Trust plc or generate 5.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	75.0%
Values	Daily Returns

GoldMining  vs.  Athelney Trust plc

GoldMining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoldMining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Athelney Trust plc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Athelney Trust plc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Athelney Trust may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GoldMining and Athelney Trust

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

The idea behind GoldMining and Athelney Trust plc 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 CEOs Directory module to screen CEOs from public companies around the world.