Correlation Between Sui and Adventure Gold

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

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

Diversification Opportunities for Sui and Adventure Gold

0.62

Correlation Coefficient

Sui  Adventure Gold

Poor diversification

The 3 months correlation between Sui and Adventure is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sui and Adventure Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adventure Gold and Sui 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 Sui are associated (or correlated) with Adventure Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adventure Gold has no effect on the direction of Sui i.e., Sui and Adventure Gold go up and down completely randomly.

Pair Corralation between Sui and Adventure Gold

Assuming the 90 days trading horizon Sui is expected to generate 1.24 times less return on investment than Adventure Gold. But when comparing it to its historical volatility, Sui is 2.26 times less risky than Adventure Gold. It trades about 0.3 of its potential returns per unit of risk. Adventure Gold is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  135.00  in Adventure Gold on October 6, 2024 and sell it today you would earn a total of  139.00  from holding Adventure Gold or generate 102.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.73%
Values	Daily Returns

Sui  vs.  Adventure Gold

Sui

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sui are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Sui exhibited solid returns over the last few months and may actually be approaching a breakup point.

Adventure Gold

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Adventure Gold are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Adventure Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sui and Adventure Gold

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

The idea behind Sui and Adventure Gold 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.