Correlation Between De Grey and Aya Gold

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

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

Diversification Opportunities for De Grey and Aya Gold

0.65

Correlation Coefficient

De Grey  Aya Gold

Poor diversification

The 3 months correlation between DGD and Aya is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver and De Grey 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 De Grey Mining are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of De Grey i.e., De Grey and Aya Gold go up and down completely randomly.

Pair Corralation between De Grey and Aya Gold

Assuming the 90 days trading horizon De Grey is expected to generate 1.03 times less return on investment than Aya Gold. But when comparing it to its historical volatility, De Grey Mining is 1.91 times less risky than Aya Gold. It trades about 0.14 of its potential returns per unit of risk. Aya Gold Silver is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  752.00  in Aya Gold Silver on December 20, 2024 and sell it today you would earn a total of  113.00  from holding Aya Gold Silver or generate 15.03% return on investment over 90 days.

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

De Grey Mining  vs.  Aya Gold Silver

De Grey Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in De Grey Mining are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, De Grey unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aya Gold Silver

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aya Gold Silver are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Aya Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with De Grey and Aya Gold

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

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