Correlation Between Golden Star and Amani Gold

Can any of the company-specific risk be diversified away by investing in both Golden Star and Amani 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 Golden Star and Amani Gold 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 Amani Gold Limited, you can compare the effects of market volatilities on Golden Star and Amani 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 Golden Star with a short position of Amani Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and Amani Gold.

Diversification Opportunities for Golden Star and Amani Gold

0.0

Correlation Coefficient

Golden Star  Amani Gold

Pay attention - limited upside

The 3 months correlation between Golden and Amani is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Resource and Amani Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amani Gold Limited 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 Amani Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amani Gold Limited has no effect on the direction of Golden Star i.e., Golden Star and Amani Gold go up and down completely randomly.

Pair Corralation between Golden Star and Amani Gold

If you would invest (100.00) in Amani Gold Limited on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Amani Gold Limited or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Golden Star Resource  vs.  Amani Gold Limited

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Amani Gold Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amani Gold Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Amani Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Golden Star and Amani Gold

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

The idea behind Golden Star Resource and Amani Gold Limited 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 Valuation module to check real value of public entities based on technical and fundamental data.