Correlation Between SSR Mining and AuQ Gold

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

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

Diversification Opportunities for SSR Mining and AuQ Gold

-0.63

Correlation Coefficient

SSR Mining  AuQ Gold

Excellent diversification

The 3 months correlation between SSR and AuQ is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding SSR Mining and AuQ Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AuQ Gold Mining and SSR Mining 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 SSR Mining are associated (or correlated) with AuQ Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AuQ Gold Mining has no effect on the direction of SSR Mining i.e., SSR Mining and AuQ Gold go up and down completely randomly.

Pair Corralation between SSR Mining and AuQ Gold

Given the investment horizon of 90 days SSR Mining is expected to under-perform the AuQ Gold. In addition to that, SSR Mining is 1.1 times more volatile than AuQ Gold Mining. It trades about -0.11 of its total potential returns per unit of risk. AuQ Gold Mining is currently generating about 0.03 per unit of volatility. If you would invest  4.00  in AuQ Gold Mining on January 19, 2024 and sell it today you would earn a total of  0.19  from holding AuQ Gold Mining or generate 4.75% return on investment over 90 days.

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

SSR Mining  vs.  AuQ Gold Mining

SSR Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSR Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

AuQ Gold Mining

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with SSR Mining and AuQ Gold

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

The idea behind SSR Mining and AuQ Gold Mining 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.