Correlation Between Amani Gold and Mining Global

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

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

Diversification Opportunities for Amani Gold and Mining Global

1.0

Correlation Coefficient

Amani Gold  Mining Global

No risk reduction

The 3 months correlation between Amani and Mining is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Amani Gold Limited and Mining Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mining Global and Amani 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 Amani Gold Limited are associated (or correlated) with Mining Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mining Global has no effect on the direction of Amani Gold i.e., Amani Gold and Mining Global go up and down completely randomly.

Pair Corralation between Amani Gold and Mining Global

If you would invest  0.01  in Mining Global on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Mining Global or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	1.56%
Values	Daily Returns

Amani Gold Limited  vs.  Mining Global

Amani Gold Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mining Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Amani Gold and Mining Global

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

The idea behind Amani Gold Limited and Mining Global 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.