Correlation Between Carlin Gold and Arizona Sonoran

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

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

Diversification Opportunities for Carlin Gold and Arizona Sonoran

0.33

Correlation Coefficient

Carlin Gold  Arizona Sonoran

Weak diversification

The 3 months correlation between Carlin and Arizona is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Carlin Gold and Arizona Sonoran Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Sonoran Copper and Carlin 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 Carlin Gold are associated (or correlated) with Arizona Sonoran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Sonoran Copper has no effect on the direction of Carlin Gold i.e., Carlin Gold and Arizona Sonoran go up and down completely randomly.

Pair Corralation between Carlin Gold and Arizona Sonoran

Assuming the 90 days horizon Carlin Gold is expected to generate 2.46 times more return on investment than Arizona Sonoran. However, Carlin Gold is 2.46 times more volatile than Arizona Sonoran Copper. It trades about 0.02 of its potential returns per unit of risk. Arizona Sonoran Copper is currently generating about 0.0 per unit of risk. If you would invest  30.00  in Carlin Gold on September 16, 2024 and sell it today you would lose (14.00) from holding Carlin Gold or give up 46.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

Carlin Gold  vs.  Arizona Sonoran Copper

Carlin Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlin Gold 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 fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Arizona Sonoran Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arizona Sonoran Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Arizona Sonoran is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Carlin Gold and Arizona Sonoran

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

The idea behind Carlin Gold and Arizona Sonoran Copper 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.