Correlation Between Arizona Sonoran and Roscan Gold

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

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

Diversification Opportunities for Arizona Sonoran and Roscan Gold

0.5

Correlation Coefficient

Arizona Sonoran  Roscan Gold

Very weak diversification

The 3 months correlation between Arizona and Roscan is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Arizona Sonoran Copper and Roscan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roscan Gold Corp and Arizona Sonoran 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 Arizona Sonoran Copper are associated (or correlated) with Roscan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roscan Gold Corp has no effect on the direction of Arizona Sonoran i.e., Arizona Sonoran and Roscan Gold go up and down completely randomly.

Pair Corralation between Arizona Sonoran and Roscan Gold

Assuming the 90 days trading horizon Arizona Sonoran Copper is expected to under-perform the Roscan Gold. But the stock apears to be less risky and, when comparing its historical volatility, Arizona Sonoran Copper is 2.24 times less risky than Roscan Gold. The stock trades about -0.05 of its potential returns per unit of risk. The Roscan Gold Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Roscan Gold Corp on September 21, 2024 and sell it today you would lose (1.50) from holding Roscan Gold Corp or give up 18.75% of portfolio value over 90 days.

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

Arizona Sonoran Copper  vs.  Roscan Gold Corp

Arizona Sonoran Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arizona Sonoran Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Roscan Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roscan Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Arizona Sonoran and Roscan Gold

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

The idea behind Arizona Sonoran Copper and Roscan 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.