Correlation Between St Galler and Golden Metal
Can any of the company-specific risk be diversified away by investing in both St Galler 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 St Galler and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Galler Kantonalbank and Golden Metal Resources, you can compare the effects of market volatilities on St Galler 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 St Galler with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Golden Metal.
Diversification Opportunities for St Galler and Golden Metal
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0QQZ and Golden is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank 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 St Galler 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 St Galler Kantonalbank 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 St Galler i.e., St Galler and Golden Metal go up and down completely randomly.
Pair Corralation between St Galler and Golden Metal
Assuming the 90 days trading horizon St Galler is expected to generate 10.26 times less return on investment than Golden Metal. But when comparing it to its historical volatility, St Galler Kantonalbank is 6.41 times less risky than Golden Metal. It trades about 0.1 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,000 in Golden Metal Resources on November 4, 2024 and sell it today you would earn a total of 300.00 from holding Golden Metal Resources or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
St Galler Kantonalbank vs. Golden Metal Resources
Performance |
| Timeline |
| St Galler Kantonalbank |
| Golden Metal Resources |
St Galler and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and Golden Metal
The main advantage of trading using opposite St Galler and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler 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.| St Galler vs. AMG Advanced Metallurgical | St Galler vs. GoldMining | St Galler vs. CleanTech Lithium plc | St Galler vs. Jacquet Metal Service |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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