Correlation Between Americas Gold and TYSON FOODS

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

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

Diversification Opportunities for Americas Gold and TYSON FOODS

-0.6

Correlation Coefficient

Americas Gold  TYSON FOODS

Excellent diversification

The 3 months correlation between Americas and TYSON is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Americas Gold and and TYSON FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TYSON FOODS A and Americas 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 Americas Gold and are associated (or correlated) with TYSON FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TYSON FOODS A has no effect on the direction of Americas Gold i.e., Americas Gold and TYSON FOODS go up and down completely randomly.

Pair Corralation between Americas Gold and TYSON FOODS

Assuming the 90 days trading horizon Americas Gold and is expected to generate 3.66 times more return on investment than TYSON FOODS. However, Americas Gold is 3.66 times more volatile than TYSON FOODS A . It trades about 0.08 of its potential returns per unit of risk. TYSON FOODS A is currently generating about -0.01 per unit of risk. If you would invest  40.00  in Americas Gold and on October 26, 2024 and sell it today you would earn a total of  7.00  from holding Americas Gold and or generate 17.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Americas Gold and  vs.  TYSON FOODS A

Americas Gold

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Americas Gold and are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Americas Gold reported solid returns over the last few months and may actually be approaching a breakup point.

TYSON FOODS A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TYSON FOODS A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, TYSON FOODS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Americas Gold and TYSON FOODS

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

The idea behind Americas Gold and and TYSON FOODS A 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.