Correlation Between Centerra Gold and Ag Growth

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

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

Diversification Opportunities for Centerra Gold and Ag Growth

-0.42

Correlation Coefficient

Centerra Gold  Ag Growth

Very good diversification

The 3 months correlation between Centerra and AFN is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Centerra Gold and Ag Growth International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ag Growth International and Centerra 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 Centerra Gold are associated (or correlated) with Ag Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ag Growth International has no effect on the direction of Centerra Gold i.e., Centerra Gold and Ag Growth go up and down completely randomly.

Pair Corralation between Centerra Gold and Ag Growth

Assuming the 90 days horizon Centerra Gold is expected to generate 0.95 times more return on investment than Ag Growth. However, Centerra Gold is 1.05 times less risky than Ag Growth. It trades about 0.08 of its potential returns per unit of risk. Ag Growth International is currently generating about -0.26 per unit of risk. If you would invest  810.00  in Centerra Gold on December 21, 2024 and sell it today you would earn a total of  85.00  from holding Centerra Gold or generate 10.49% return on investment over 90 days.

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

Centerra Gold  vs.  Ag Growth International

Centerra Gold

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Centerra Gold are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Centerra Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ag Growth International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ag Growth International 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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Centerra Gold and Ag Growth

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

The idea behind Centerra Gold and Ag Growth International 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.