Correlation Between Auriant Mining and Arctic Gold

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

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

Diversification Opportunities for Auriant Mining and Arctic Gold

0.34

Correlation Coefficient

Auriant Mining  Arctic Gold

Weak diversification

The 3 months correlation between Auriant and Arctic is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Auriant Mining AB and Arctic Gold Publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Gold Publ and Auriant Mining 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 Auriant Mining AB are associated (or correlated) with Arctic Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Gold Publ has no effect on the direction of Auriant Mining i.e., Auriant Mining and Arctic Gold go up and down completely randomly.

Pair Corralation between Auriant Mining and Arctic Gold

Assuming the 90 days trading horizon Auriant Mining AB is expected to generate 2.16 times more return on investment than Arctic Gold. However, Auriant Mining is 2.16 times more volatile than Arctic Gold Publ. It trades about 0.08 of its potential returns per unit of risk. Arctic Gold Publ is currently generating about 0.02 per unit of risk. If you would invest  120.00  in Auriant Mining AB on September 5, 2024 and sell it today you would earn a total of  20.00  from holding Auriant Mining AB or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Auriant Mining AB  vs.  Arctic Gold Publ

Auriant Mining AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Auriant Mining AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Auriant Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Arctic Gold Publ

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arctic Gold Publ are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Arctic Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Auriant Mining and Arctic Gold

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

The idea behind Auriant Mining AB and Arctic Gold Publ 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.