Correlation Between Advance Gold and Allegiant Gold

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

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

Diversification Opportunities for Advance Gold and Allegiant Gold

0.0

Correlation Coefficient

Advance Gold  Allegiant Gold

Pay attention - limited upside

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

Pair Corralation between Advance Gold and Allegiant Gold

Assuming the 90 days horizon Advance Gold Corp is expected to under-perform the Allegiant Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Advance Gold Corp is 17.79 times less risky than Allegiant Gold. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Allegiant Gold is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  9.50  in Allegiant Gold on September 13, 2024 and sell it today you would earn a total of  0.50  from holding Allegiant Gold or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Advance Gold Corp  vs.  Allegiant Gold

Advance Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Allegiant Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allegiant Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Advance Gold and Allegiant Gold

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

The idea behind Advance Gold Corp and Allegiant Gold 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.