Correlation Between Aya Gold and Dolly Varden

Can any of the company-specific risk be diversified away by investing in both Aya Gold and Dolly Varden 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 Dolly Varden 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 Dolly Varden Silver, you can compare the effects of market volatilities on Aya Gold and Dolly Varden 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 Dolly Varden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aya Gold and Dolly Varden.

Diversification Opportunities for Aya Gold and Dolly Varden

0.6

Correlation Coefficient

Aya Gold  Dolly Varden

Poor diversification

The 3 months correlation between Aya and Dolly is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver and Dolly Varden Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolly Varden Silver 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 Dolly Varden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolly Varden Silver has no effect on the direction of Aya Gold i.e., Aya Gold and Dolly Varden go up and down completely randomly.

Pair Corralation between Aya Gold and Dolly Varden

Assuming the 90 days horizon Aya Gold Silver is expected to under-perform the Dolly Varden. In addition to that, Aya Gold is 1.58 times more volatile than Dolly Varden Silver. It trades about -0.01 of its total potential returns per unit of risk. Dolly Varden Silver is currently generating about 0.03 per unit of volatility. If you would invest  75.00  in Dolly Varden Silver on September 3, 2024 and sell it today you would earn a total of  2.00  from holding Dolly Varden Silver or generate 2.67% return on investment over 90 days.

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

Aya Gold Silver  vs.  Dolly Varden Silver

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. Despite nearly stable basic indicators, Aya Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Dolly Varden Silver

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dolly Varden Silver are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Dolly Varden is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aya Gold and Dolly Varden

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

The idea behind Aya Gold Silver and Dolly Varden Silver 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.