Correlation Between Evergold Corp and Aldebaran Resources

Can any of the company-specific risk be diversified away by investing in both Evergold Corp and Aldebaran Resources 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 Evergold Corp and Aldebaran Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Evergold Corp and Aldebaran Resources

-0.79

Correlation Coefficient

Evergold Corp  Aldebaran Resources

Pay attention - limited upside

The 3 months correlation between Evergold and Aldebaran is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Evergold Corp and Aldebaran Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldebaran Resources and Evergold Corp 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 Evergold Corp are associated (or correlated) with Aldebaran Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldebaran Resources has no effect on the direction of Evergold Corp i.e., Evergold Corp and Aldebaran Resources go up and down completely randomly.

Pair Corralation between Evergold Corp and Aldebaran Resources

Assuming the 90 days horizon Evergold Corp is expected to generate 1.05 times less return on investment than Aldebaran Resources. In addition to that, Evergold Corp is 3.65 times more volatile than Aldebaran Resources. It trades about 0.06 of its total potential returns per unit of risk. Aldebaran Resources is currently generating about 0.23 per unit of volatility. If you would invest  69.00  in Aldebaran Resources on September 12, 2024 and sell it today you would earn a total of  62.00  from holding Aldebaran Resources or generate 89.86% return on investment over 90 days.

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

Evergold Corp  vs.  Aldebaran Resources

Evergold Corp

Risk-Adjusted Performance

4 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Evergold Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Evergold Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Aldebaran Resources

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aldebaran Resources are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aldebaran Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evergold Corp and Aldebaran Resources

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

The idea behind Evergold Corp and Aldebaran Resources 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.