Correlation Between Antioquia Gold and Rise Gold

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

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

Diversification Opportunities for Antioquia Gold and Rise Gold

-0.08

Correlation Coefficient

Antioquia Gold  Rise Gold

Good diversification

The 3 months correlation between Antioquia and Rise is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Antioquia Gold and Rise Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rise Gold Corp and Antioquia 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 Antioquia Gold are associated (or correlated) with Rise Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rise Gold Corp has no effect on the direction of Antioquia Gold i.e., Antioquia Gold and Rise Gold go up and down completely randomly.

Pair Corralation between Antioquia Gold and Rise Gold

Assuming the 90 days horizon Antioquia Gold is expected to generate 9.63 times more return on investment than Rise Gold. However, Antioquia Gold is 9.63 times more volatile than Rise Gold Corp. It trades about 0.11 of its potential returns per unit of risk. Rise Gold Corp is currently generating about 0.04 per unit of risk. If you would invest  0.70  in Antioquia Gold on December 21, 2024 and sell it today you would earn a total of  0.80  from holding Antioquia Gold or generate 114.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Antioquia Gold  vs.  Rise Gold Corp

Antioquia Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Antioquia Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Antioquia Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Rise Gold Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rise Gold Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Rise Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Antioquia Gold and Rise Gold

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

The idea behind Antioquia Gold and Rise Gold Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.