Correlation Between Galiano Gold and AngloGold Ashanti

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

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

Diversification Opportunities for Galiano Gold and AngloGold Ashanti

0.0

Correlation Coefficient

Galiano Gold  AngloGold Ashanti

Pay attention - limited upside

The 3 months correlation between Galiano and AngloGold is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Galiano Gold and AngloGold Ashanti plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti plc and Galiano 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 Galiano Gold are associated (or correlated) with AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti plc has no effect on the direction of Galiano Gold i.e., Galiano Gold and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between Galiano Gold and AngloGold Ashanti

If you would invest (100.00) in Galiano Gold on January 31, 2024 and sell it today you would earn a total of  100.00  from holding Galiano Gold or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Galiano Gold  vs.  AngloGold Ashanti plc

Galiano Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galiano Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Galiano Gold is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

AngloGold Ashanti plc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AngloGold Ashanti plc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, AngloGold Ashanti unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galiano Gold and AngloGold Ashanti

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

The idea behind Galiano Gold and AngloGold Ashanti plc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.