Correlation Between Europac Gold and Ab New

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

By analyzing existing cross correlation between Europac Gold Fund and Ab New Jersey, you can compare the effects of market volatilities on Europac Gold and Ab New 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 Europac Gold with a short position of Ab New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Ab New.

Diversification Opportunities for Europac Gold and Ab New

-0.33

Correlation Coefficient

Europac Gold  Ab New

Very good diversification

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

Pair Corralation between Europac Gold and Ab New

Assuming the 90 days horizon Europac Gold Fund is expected to under-perform the Ab New. In addition to that, Europac Gold is 8.25 times more volatile than Ab New Jersey. It trades about -0.22 of its total potential returns per unit of risk. Ab New Jersey is currently generating about 0.24 per unit of volatility. If you would invest  910.00  in Ab New Jersey on August 30, 2024 and sell it today you would earn a total of  13.00  from holding Ab New Jersey or generate 1.43% return on investment over 90 days.

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

Europac Gold Fund  vs.  Ab New Jersey

Europac Gold

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Europac Gold Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Europac Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ab New Jersey

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ab New Jersey are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Europac Gold and Ab New

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

The idea behind Europac Gold Fund and Ab New Jersey 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.