Correlation Between 019736AG2 and Centerra Gold

Can any of the company-specific risk be diversified away by investing in both 019736AG2 and Centerra 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 019736AG2 and Centerra Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US019736AG29 and Centerra Gold, you can compare the effects of market volatilities on 019736AG2 and Centerra 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 019736AG2 with a short position of Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of 019736AG2 and Centerra Gold.

Diversification Opportunities for 019736AG2 and Centerra Gold

0.37

Correlation Coefficient

019736AG2  Centerra Gold

Weak diversification

The 3 months correlation between 019736AG2 and Centerra is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding US019736AG29 and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold and 019736AG2 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 US019736AG29 are associated (or correlated) with Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of 019736AG2 i.e., 019736AG2 and Centerra Gold go up and down completely randomly.

Pair Corralation between 019736AG2 and Centerra Gold

Assuming the 90 days trading horizon US019736AG29 is expected to generate 0.27 times more return on investment than Centerra Gold. However, US019736AG29 is 3.65 times less risky than Centerra Gold. It trades about -0.17 of its potential returns per unit of risk. Centerra Gold is currently generating about -0.16 per unit of risk. If you would invest  9,002  in US019736AG29 on October 21, 2024 and sell it today you would lose (596.00) from holding US019736AG29 or give up 6.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

US019736AG29  vs.  Centerra Gold

US019736AG29

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US019736AG29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US019736AG29 investors.

Centerra Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centerra Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with 019736AG2 and Centerra Gold

The main advantage of trading using opposite 019736AG2 and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 019736AG2 position performs unexpectedly, Centerra 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 Centerra Gold will offset losses from the drop in Centerra Gold's long position.

The idea behind US019736AG29 and Centerra 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.