Correlation Between GoldMining and CAP LEASE
Can any of the company-specific risk be diversified away by investing in both GoldMining and CAP LEASE 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 CAP LEASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and CAP LEASE AVIATION, you can compare the effects of market volatilities on GoldMining and CAP LEASE 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 CAP LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and CAP LEASE.
Diversification Opportunities for GoldMining and CAP LEASE
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GoldMining and CAP is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION 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 CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of GoldMining i.e., GoldMining and CAP LEASE go up and down completely randomly.
Pair Corralation between GoldMining and CAP LEASE
Assuming the 90 days trading horizon GoldMining is expected to under-perform the CAP LEASE. In addition to that, GoldMining is 1.23 times more volatile than CAP LEASE AVIATION. It trades about -0.03 of its total potential returns per unit of risk. CAP LEASE AVIATION is currently generating about -0.03 per unit of volatility. If you would invest 100.00 in CAP LEASE AVIATION on October 11, 2024 and sell it today you would lose (50.00) from holding CAP LEASE AVIATION or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 39.21% |
| Values | Daily Returns |
GoldMining vs. CAP LEASE AVIATION
Performance |
| Timeline |
| GoldMining |
| CAP LEASE AVIATION |
GoldMining and CAP LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and CAP LEASE
The main advantage of trading using opposite GoldMining and CAP LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, CAP LEASE 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 CAP LEASE will offset losses from the drop in CAP LEASE's long position.| GoldMining vs. Cairn Homes PLC | GoldMining vs. Waste Management | GoldMining vs. Finnair Oyj | GoldMining vs. Wizz Air Holdings |
| CAP LEASE vs. Allianz Technology Trust | CAP LEASE vs. Lundin Mining Corp | CAP LEASE vs. Learning Technologies Group | CAP LEASE vs. Celebrus Technologies plc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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