Correlation Between Aya Gold and Guanajuato Silver

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

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

Diversification Opportunities for Aya Gold and Guanajuato Silver

0.5

Correlation Coefficient

Aya Gold  Guanajuato Silver

Very weak diversification

The 3 months correlation between Aya and Guanajuato is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver and Guanajuato Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guanajuato Silver and Aya 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 Aya Gold Silver are associated (or correlated) with Guanajuato Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guanajuato Silver has no effect on the direction of Aya Gold i.e., Aya Gold and Guanajuato Silver go up and down completely randomly.

Pair Corralation between Aya Gold and Guanajuato Silver

Assuming the 90 days horizon Aya Gold Silver is expected to generate 0.75 times more return on investment than Guanajuato Silver. However, Aya Gold Silver is 1.33 times less risky than Guanajuato Silver. It trades about 0.05 of its potential returns per unit of risk. Guanajuato Silver is currently generating about 0.01 per unit of risk. If you would invest  579.00  in Aya Gold Silver on February 26, 2024 and sell it today you would earn a total of  451.00  from holding Aya Gold Silver or generate 77.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Aya Gold Silver  vs.  Guanajuato Silver

Aya Gold Silver

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aya Gold Silver are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Aya Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Guanajuato Silver

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guanajuato Silver are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Guanajuato Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aya Gold and Guanajuato Silver

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

The idea behind Aya Gold Silver and Guanajuato Silver 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.