Correlation Between Allegiant Gold and Currency Exchange

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

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

Diversification Opportunities for Allegiant Gold and Currency Exchange

-0.5

Correlation Coefficient

Allegiant Gold  Currency Exchange

Very good diversification

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

Pair Corralation between Allegiant Gold and Currency Exchange

Assuming the 90 days trading horizon Allegiant Gold is expected to generate 9.86 times more return on investment than Currency Exchange. However, Allegiant Gold is 9.86 times more volatile than Currency Exchange International. It trades about 0.19 of its potential returns per unit of risk. Currency Exchange International is currently generating about 0.0 per unit of risk. If you would invest  14.00  in Allegiant Gold on April 25, 2025 and sell it today you would earn a total of  46.00  from holding Allegiant Gold or generate 328.57% return on investment over 90 days.

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

Allegiant Gold  vs.  Currency Exchange Internationa

Allegiant Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allegiant Gold are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Allegiant Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Currency Exchange

Risk-Adjusted Performance

Very Weak

Over the last 90 days Currency Exchange International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Currency Exchange is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Allegiant Gold and Currency Exchange

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

The idea behind Allegiant Gold and Currency Exchange International 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.