Correlation Between Eminent Gold and Angus Ventures

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

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

Diversification Opportunities for Eminent Gold and Angus Ventures

-0.17

Correlation Coefficient

Eminent Gold  Angus Ventures

Good diversification

The 3 months correlation between Eminent and Angus is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Eminent Gold Corp and Angus Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angus Ventures and Eminent 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 Eminent Gold Corp are associated (or correlated) with Angus Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angus Ventures has no effect on the direction of Eminent Gold i.e., Eminent Gold and Angus Ventures go up and down completely randomly.

Pair Corralation between Eminent Gold and Angus Ventures

Assuming the 90 days trading horizon Eminent Gold Corp is expected to generate 1.22 times more return on investment than Angus Ventures. However, Eminent Gold is 1.22 times more volatile than Angus Ventures. It trades about 0.02 of its potential returns per unit of risk. Angus Ventures is currently generating about -0.06 per unit of risk. If you would invest  29.00  in Eminent Gold Corp on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Eminent Gold Corp or generate 0.0% return on investment over 90 days.

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

Eminent Gold Corp  vs.  Angus Ventures

Eminent Gold Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eminent Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Eminent Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Angus Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Angus Ventures 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.

Pair Trading with Eminent Gold and Angus Ventures

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

The idea behind Eminent Gold Corp and Angus Ventures 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.