Correlation Between Brilliance China and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both Brilliance China and Alamos 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 Brilliance China and Alamos Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brilliance China Automotive and Alamos Gold, you can compare the effects of market volatilities on Brilliance China and Alamos 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 Brilliance China with a short position of Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brilliance China and Alamos Gold.
Diversification Opportunities for Brilliance China and Alamos Gold
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brilliance and Alamos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Brilliance China Automotive and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and Brilliance China 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 Brilliance China Automotive are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Brilliance China i.e., Brilliance China and Alamos Gold go up and down completely randomly.
Pair Corralation between Brilliance China and Alamos Gold
If you would invest (100.00) in Alamos Gold on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Alamos Gold or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Brilliance China Automotive vs. Alamos Gold
Performance |
Timeline |
Brilliance China Aut |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alamos Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Brilliance China and Alamos Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brilliance China and Alamos Gold
The main advantage of trading using opposite Brilliance China and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brilliance China position performs unexpectedly, Alamos 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.Brilliance China vs. PennantPark Investment | Brilliance China vs. DataDot Technology Limited | Brilliance China vs. Cadence Design Systems | Brilliance China vs. Western Asset Investment |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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