Correlation Between GoldMining and Bell Food
Can any of the company-specific risk be diversified away by investing in both GoldMining and Bell Food 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 GoldMining and Bell Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Bell Food Group, you can compare the effects of market volatilities on GoldMining and Bell Food 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 GoldMining with a short position of Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Bell Food.
Diversification Opportunities for GoldMining and Bell Food
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GoldMining and Bell is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group and GoldMining 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 GoldMining are associated (or correlated) with Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of GoldMining i.e., GoldMining and Bell Food go up and down completely randomly.
Pair Corralation between GoldMining and Bell Food
Assuming the 90 days trading horizon GoldMining is expected to generate 1.43 times more return on investment than Bell Food. However, GoldMining is 1.43 times more volatile than Bell Food Group. It trades about 0.08 of its potential returns per unit of risk. Bell Food Group is currently generating about -0.12 per unit of risk. If you would invest 111.00 in GoldMining on October 26, 2024 and sell it today you would earn a total of 2.00 from holding GoldMining or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 57.89% |
| Values | Daily Returns |
GoldMining vs. Bell Food Group
Performance |
| Timeline |
| GoldMining |
| Bell Food Group |
GoldMining and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Bell Food
The main advantage of trading using opposite GoldMining and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, Bell Food 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 Bell Food will offset losses from the drop in Bell Food's long position.| GoldMining vs. Berkshire Hathaway | GoldMining vs. Samsung Electronics Co | GoldMining vs. Samsung Electronics Co | GoldMining vs. Chocoladefabriken Lindt Spruengli |
| Bell Food vs. Cairo Communication SpA | Bell Food vs. Zegona Communications Plc | Bell Food vs. Sligro Food Group | Bell Food vs. Roebuck Food Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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