Correlation Between Golden Star and Aurion Resources

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

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

Diversification Opportunities for Golden Star and Aurion Resources

-0.61

Correlation Coefficient

Golden Star  Aurion Resources

Excellent diversification

The 3 months correlation between Golden and Aurion is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Resource and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and Golden Star 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 Golden Star Resource are associated (or correlated) with Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of Golden Star i.e., Golden Star and Aurion Resources go up and down completely randomly.

Pair Corralation between Golden Star and Aurion Resources

Given the investment horizon of 90 days Golden Star Resource is expected to under-perform the Aurion Resources. In addition to that, Golden Star is 1.34 times more volatile than Aurion Resources. It trades about -0.13 of its total potential returns per unit of risk. Aurion Resources is currently generating about 0.12 per unit of volatility. If you would invest  43.00  in Aurion Resources on November 29, 2024 and sell it today you would earn a total of  10.00  from holding Aurion Resources or generate 23.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.65%
Values	Daily Returns

Golden Star Resource  vs.  Aurion Resources

Golden Star Resource

Risk-Adjusted Performance

Very Weak

Over the last 90 days Golden Star Resource 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 comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Aurion Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurion Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aurion Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golden Star and Aurion Resources

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

The idea behind Golden Star Resource and Aurion 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.