Correlation Between Aya Gold and Terravest Capital

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

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

Diversification Opportunities for Aya Gold and Terravest Capital

-0.76

Correlation Coefficient

Aya Gold  Terravest Capital

Pay attention - limited upside

The 3 months correlation between Aya and Terravest is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver and Terravest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terravest Capital and Aya 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 Aya Gold Silver are associated (or correlated) with Terravest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terravest Capital has no effect on the direction of Aya Gold i.e., Aya Gold and Terravest Capital go up and down completely randomly.

Pair Corralation between Aya Gold and Terravest Capital

Assuming the 90 days trading horizon Aya Gold Silver is expected to under-perform the Terravest Capital. In addition to that, Aya Gold is 2.34 times more volatile than Terravest Capital. It trades about -0.05 of its total potential returns per unit of risk. Terravest Capital is currently generating about 0.23 per unit of volatility. If you would invest  9,853  in Terravest Capital on September 13, 2024 and sell it today you would earn a total of  2,755  from holding Terravest Capital or generate 27.96% return on investment over 90 days.

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

Aya Gold Silver  vs.  Terravest Capital

Aya Gold Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aya Gold Silver 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 very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Terravest Capital

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Terravest Capital are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal forward-looking signals, Terravest Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aya Gold and Terravest Capital

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

The idea behind Aya Gold Silver and Terravest Capital 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .