Correlation Between TRU Precious and Augusta Gold

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

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

Diversification Opportunities for TRU Precious and Augusta Gold

-0.29

Correlation Coefficient

TRU Precious  Augusta Gold

Very good diversification

The 3 months correlation between TRU and Augusta is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding TRU Precious Metals and Augusta Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Augusta Gold Corp and TRU Precious 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 TRU Precious Metals are associated (or correlated) with Augusta Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Augusta Gold Corp has no effect on the direction of TRU Precious i.e., TRU Precious and Augusta Gold go up and down completely randomly.

Pair Corralation between TRU Precious and Augusta Gold

Assuming the 90 days horizon TRU Precious is expected to generate 4.8 times less return on investment than Augusta Gold. In addition to that, TRU Precious is 2.54 times more volatile than Augusta Gold Corp. It trades about 0.02 of its total potential returns per unit of risk. Augusta Gold Corp is currently generating about 0.24 per unit of volatility. If you would invest  51.00  in Augusta Gold Corp on September 12, 2024 and sell it today you would earn a total of  53.00  from holding Augusta Gold Corp or generate 103.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

TRU Precious Metals  vs.  Augusta Gold Corp

TRU Precious Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TRU Precious Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, TRU Precious reported solid returns over the last few months and may actually be approaching a breakup point.

Augusta Gold Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Augusta Gold Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Augusta Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TRU Precious and Augusta Gold

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

The idea behind TRU Precious Metals and Augusta Gold Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.