Correlation Between Aura Minerals and Q Gold

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

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

Diversification Opportunities for Aura Minerals and Q Gold

-0.67

Correlation Coefficient

Aura Minerals  Q Gold

Excellent diversification

The 3 months correlation between Aura and QGR is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals and Q Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q Gold Resources and Aura Minerals 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 Aura Minerals are associated (or correlated) with Q Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q Gold Resources has no effect on the direction of Aura Minerals i.e., Aura Minerals and Q Gold go up and down completely randomly.

Pair Corralation between Aura Minerals and Q Gold

Assuming the 90 days trading horizon Aura Minerals is expected to generate 0.16 times more return on investment than Q Gold. However, Aura Minerals is 6.12 times less risky than Q Gold. It trades about 0.15 of its potential returns per unit of risk. Q Gold Resources is currently generating about -0.02 per unit of risk. If you would invest  883.00  in Aura Minerals on February 2, 2024 and sell it today you would earn a total of  155.00  from holding Aura Minerals or generate 17.55% return on investment over 90 days.

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

Aura Minerals  vs.  Q Gold Resources

Aura Minerals

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aura Minerals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Aura Minerals displayed solid returns over the last few months and may actually be approaching a breakup point.

Q Gold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q Gold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Aura Minerals and Q Gold

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

The idea behind Aura Minerals and Q Gold Resources 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.