Correlation Between GoldMining and Greenroc Mining
Can any of the company-specific risk be diversified away by investing in both GoldMining and Greenroc Mining 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 Greenroc Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Greenroc Mining PLC, you can compare the effects of market volatilities on GoldMining and Greenroc Mining 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 Greenroc Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Greenroc Mining.
Diversification Opportunities for GoldMining and Greenroc Mining
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GoldMining and Greenroc is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Greenroc Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenroc Mining PLC 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 Greenroc Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenroc Mining PLC has no effect on the direction of GoldMining i.e., GoldMining and Greenroc Mining go up and down completely randomly.
Pair Corralation between GoldMining and Greenroc Mining
Assuming the 90 days trading horizon GoldMining is expected to generate 0.91 times more return on investment than Greenroc Mining. However, GoldMining is 1.1 times less risky than Greenroc Mining. It trades about -0.01 of its potential returns per unit of risk. Greenroc Mining PLC is currently generating about -0.03 per unit of risk. If you would invest 155.00 in GoldMining on August 30, 2024 and sell it today you would lose (34.00) from holding GoldMining or give up 21.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 35.61% |
| Values | Daily Returns |
GoldMining vs. Greenroc Mining PLC
Performance |
| Timeline |
| GoldMining |
| Greenroc Mining PLC |
GoldMining and Greenroc Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Greenroc Mining
The main advantage of trading using opposite GoldMining and Greenroc Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, Greenroc Mining 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 Greenroc Mining will offset losses from the drop in Greenroc Mining's long position.| GoldMining vs. Ross Stores | GoldMining vs. Zoom Video Communications | GoldMining vs. Cairo Communication SpA | GoldMining vs. Dalata Hotel Group |
| Greenroc Mining vs. Bytes Technology | Greenroc Mining vs. Check Point Software | Greenroc Mining vs. G5 Entertainment AB | Greenroc Mining vs. Grand Vision Media |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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