Correlation Between Givaudan and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Givaudan and Golden Metal 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 Givaudan and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Givaudan SA and Golden Metal Resources, you can compare the effects of market volatilities on Givaudan and Golden Metal 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 Givaudan with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Givaudan and Golden Metal.
Diversification Opportunities for Givaudan and Golden Metal
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Givaudan and Golden is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Givaudan SA and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources and Givaudan 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 Givaudan SA are associated (or correlated) with Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Givaudan i.e., Givaudan and Golden Metal go up and down completely randomly.
Pair Corralation between Givaudan and Golden Metal
Assuming the 90 days trading horizon Givaudan SA is expected to under-perform the Golden Metal. But the stock apears to be less risky and, when comparing its historical volatility, Givaudan SA is 2.8 times less risky than Golden Metal. The stock trades about -0.02 of its potential returns per unit of risk. The Golden Metal Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,280 in Golden Metal Resources on November 28, 2024 and sell it today you would earn a total of 70.00 from holding Golden Metal Resources or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Givaudan SA vs. Golden Metal Resources
Performance |
| Timeline |
| Givaudan SA |
| Golden Metal Resources |
Givaudan and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Givaudan and Golden Metal
The main advantage of trading using opposite Givaudan and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Givaudan position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's long position.| Givaudan vs. Broadcom | Givaudan vs. Livermore Investments Group | Givaudan vs. Lindsell Train Investment | Givaudan vs. Kaufman Et Broad |
| Golden Metal vs. AcadeMedia AB | Golden Metal vs. JD Sports Fashion | Golden Metal vs. Atresmedia | Golden Metal vs. Liberty Media Corp |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |