Correlation Between Minaurum Gold and West African

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

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

Diversification Opportunities for Minaurum Gold and West African

0.37

Correlation Coefficient

Minaurum Gold  West African

Weak diversification

The 3 months correlation between Minaurum and West is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Minaurum Gold and West African Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West African Resources and Minaurum 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 Minaurum Gold are associated (or correlated) with West African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West African Resources has no effect on the direction of Minaurum Gold i.e., Minaurum Gold and West African go up and down completely randomly.

Pair Corralation between Minaurum Gold and West African

Assuming the 90 days horizon Minaurum Gold is expected to under-perform the West African. In addition to that, Minaurum Gold is 1.14 times more volatile than West African Resources. It trades about 0.0 of its total potential returns per unit of risk. West African Resources is currently generating about 0.01 per unit of volatility. If you would invest  104.00  in West African Resources on August 30, 2024 and sell it today you would lose (5.00) from holding West African Resources or give up 4.81% of portfolio value over 90 days.

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

Minaurum Gold  vs.  West African Resources

Minaurum Gold

Risk-Adjusted Performance

0 of 100

Very Weak

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

West African Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in West African Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, West African is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Minaurum Gold and West African

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

The idea behind Minaurum Gold and West African 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.