Correlation Between Angkor Resources and Gungnir Resources

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

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

Diversification Opportunities for Angkor Resources and Gungnir Resources

0.31

Correlation Coefficient

Angkor Resources  Gungnir Resources

Weak diversification

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

Pair Corralation between Angkor Resources and Gungnir Resources

Assuming the 90 days horizon Angkor Resources Corp is expected to generate 1.3 times more return on investment than Gungnir Resources. However, Angkor Resources is 1.3 times more volatile than Gungnir Resources. It trades about -0.09 of its potential returns per unit of risk. Gungnir Resources is currently generating about -0.16 per unit of risk. If you would invest  7.80  in Angkor Resources Corp on August 30, 2024 and sell it today you would lose (1.25) from holding Angkor Resources Corp or give up 16.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Angkor Resources Corp  vs.  Gungnir Resources

Angkor Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gungnir Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Angkor Resources and Gungnir Resources

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

The idea behind Angkor Resources Corp and Gungnir Resources 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.